I don't see it as a plot hole though. I mean for all we know Josh could not really have been the popular one in school.
I think that in the musical it is clear that they miss him because they are all very excited when they find out that the grown man standing in front of them is Josh.
I think that if you look at it in a different angel it could look like they knew that Josh was gone.
In the movie, there are a ton of police in front of Josh's house. Maybe they heard about it from one person or another? Who knows.
I have always viewed It's Time, as Billy's way of trying to take his mind off of what is going on between him and Josh, and to just focus on being with his friends.
"If you try to shag my husband while I am still alive, I will shove the art of motorcycle maintenance up your rancid little Cu**. That's a good dear"
Tom Stoppard's Rock N Roll