No, they noticed. 90 years ago, 2/3 of the world's books were in Germany. They were educated and literate and knew what they were doing and what was happening. Germans were acutely aware of the reality of the day to day situation and their previous history in WW1.
I just read the book last week. What you said is not true in any useful sense. “Germans were acutely aware…” tries to reduce an entire population and years into one statement. Reality has much more color. For the germans interviewed in the book, it seems to be true that many had read or heard about the camps or other atrocities, but (1) not the “final solution” which was not in the press and (2) there seems to be hea…
There was not much hidden, the goal of making a big war in the east to conquer new land for the Aryans was there in big letters in the open.
His views towards jews likewise.
So they knew. Maybe largely did not wanted to know. And they did celebrate the victories of the german army as their own. They only stopped celebrating after the victories stopped happening and it was more and more clear that the war will be lost.