That question, of what happens after we die, has always mystified me. The question that is almost impossible to answer with any level of certainty.
The idea of going away into oblivion, into the “dark room” that you can never emerge from, as Watts said, is indeed horrifying. It makes my stomach turn, just at the thought of it. On the other side of the spectrum, the idea that we somehow persist afterwards seems convenient; but a bit too easy. It seems like its just my “ego” wanting to exist forever, when it may not really be practical.
The idea, however, the “you” are “everything”, or that you are the “universe experiencing itself”; means that, in a manner of speaking, you are like a thought in the mind of the universe, one of a countless array of thoughts that it thinks in infinite permutations. I feel much better thinking of it that way. It seems far more balanced and correct.
Still, there is a sadness inside me, that thinks, this individual me should go on existing forever. Who knows? Maybe the Buddhists who speak of reincarnation of the soul were correct. Perhaps our individual soul is reborn, to a point, so as to evolve over many lifetimes, with the eventual option to “return to source.”