I think the building blocks of life are so common in the universe it might be a case of "easy come, easy go". It wouldn't be surprising if simple life happened anywhere it was given half a chance at all, but one would equally expect that it would die out just as quickly when conditions changed (which they certainly did on Mars).

And of course nothing is ruling out life in the nooks and crannies of Mars.

Presumably the planet became much less geologically active, causing Mars to lose it's magnetic field and thus it's atmosphere, and that caused a mass extinction. If there was life on the surface in the past, I imagine it still exists deep underground or in lava tubes or such.

That actually isn't a hard question to answer. Mars lacks an active core or a magnetosphere, so the atmosphere blew away, freezing the surface and removing almost all of the liquid water.

We have proven that Mars used to have a magnetic field like Earth that protected it from solar radiation. We also know that it does not presently have a magnetic field. At some point in the distant past, Mars's core cooled and solidified, which removes the magnetic field.

The big problem is that the solar wind strips away the atmosphere and water, but that's (probably) not what killed all Martian life. As the magnetic field decreases, more and more harmful radiation reaches the surface. The planet was probably sterilized by radiation long before the atmosphere was lost and the oceans evaporated.

We're pretty sure this is what happened. We've been studying Mars's geology for a long time and we can see evidence for most of this process.

It may still be there doing it's thing, mostly underground. The surface of Mars is currently very dry for any life we know but there seems to be water underground https://www.bbc.co.uk/news/science-environment-54337779

Likely, when Mars went bad, their planet B was Earth. Nowadays they call themselves Earthlings (AKA us).