I'll preface this by saying, let's not make this a discussion about General chat, please.
As for the lower number of users, it depends on what days you're looking at the game. On average, there are approximately 100 less users on per day than there were a year ago, but the numbers do frequently rise to 900+ users on the weekends, at about 4-7pm EST when most kids are home from school, in both the US and Europe, where most of our userbase is. And the average weekday topper is about 700ish users, sometimes reaching 800. However, this is to be expected on weekdays, since many have school.
So, while there may be a few less people, FH is by no means "dead," nor do I see it becoming so any time soon.
As for your friends, it could very well be that--as Aniuk said--some of your friends have lost some interest in the game. They may have lost their spark for RP, or found other games they like. Or, their lives may just be busier nowadays, and they don't have as much time to jump on FH like they used to. That happens all around, so it's not unexpected. o:
I do hope you can get in touch with them sometime, though. It's never fun when your friends are offline for a long time.