I imagine that if you just want to go to the bar/lounge you still could. But as Nikole said, the lounge area is quite small and the bar won't win a prize for size either. On a busy nite, you may have to stand the whole time.
That's what happened to us last year. We had PS for dinner (on Saturday nite)at 8:00. We arrived at 7:45 and weren't seated until 9:05--and we had to stand the whole time. There were no seats at the bar or in the lounge and when someone got up to leave (or eat) there was a fierce struggle for that seat.
Reminded me a whole lot of a shopping center parking lot at XMAS--when one car leaves, and 10 others rush for that spot.
As for the "no PS-no observation deck " thing--I think they almost had to do it. It is crowded enough at CG each nite, and adding scores of folks just there to watch fireworks made it quite intolerable crowd-wise.