It wasn't because of a plague, it was because some guy brought dirt from Jerusalem and put it in that grave, and everyone wanted to be buried in that graveyard after that. It got so bad the priests had to make a ruling, saying the soul leaves the body after a certain amount of time so they can remove the older corpses and put the newer ones in. Can't quite remember why all the bone decorations though. Maybe they just were desperate to find some purpose for the surplus of bones.