Why does it say "Yir'u Yesharim v'Yismachu"?
Esther Rabah (7:9): What Resha'im see makes them descend to Gehinom - "va'Yar Haman Ki Ein Mordechai Kore'a" (Esther 3:5), "va'Yar Bnei ha'Elokim 1 Es Bnos ha'Adam" (Bereishis 6:2). What Tzadikim see makes them ascend to a great level - "va'Yar v'Hinei Ayil" (Bereishis 22:4), va'Yar v'Hinei Sneh" (Shemos 3:2), "va'Yar Pinchas" (Bamidbar 25:7).
Otzar Midrashim (Mashi'ach p.395): If one was Naki (clean from sin), Hashem breaks his enemies in front of him, and gladdens him via their downfall 2 .
Radak: They will see vengeance against Resha'im, and rejoice.
Malbim: Yesharim are people who go straight, according to their understanding. They will recognize that all this is Hashem's Hashgachah.
This is like the opinion that Bnei ha'Elokim are people (refer to Bereishis 6:2:1:1-4). Gehinom does not apply to angels! (PF)
Megilah 16a: "Do not rejoice in the fall of your enemy" (Mishlei 24:17) applies only to a Jewish enemy.
What is the meaning of "Kaftzah"?
Rashi: It closed. This is like "Lo Sikpotz Es Yadecha" (Devarim 15:7).
What is the meaning of "v'Chol Avlah Kaftzah Piha"?
Radak, Malbim: Every evildoer will close his mouth and be ashamed to speak, for he will see that Hashem sees their ways and returns payment on their heads.