The neighbour (Thorwald) did kill his wife. Thorwald catches on to Jimmy Stewart and then hunts him down in his apartment. Being in a wheel chair he's practically defenseless. Thorwald manages to throw him out the window but then gets arrested. Stewart re-breaks both his legs and continues to see Lisa (Grace Kelly). (Lisa is not wearing a wedding ring in the last shot).
Continuity mistake: When Miss Lonelyheart brings home a younger man, she slaps him on the left side of his face, but when he leaves and stands outside her door, he rubs the right side as if it hurts.
Trivia: If you look closely in one of the shots looking at the musician's pad you can see Hitchcock making a cameo like he does in all his movies. If you pay attention however, you might notice that this is a reenactment of a scene from one of his other movies, 'Rope.' Also, Hitchcock is standing in for James Stewart and the character he played in 'Rope' since Mr. Stewart is busy spying on this scene.(00:26:15)
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Chosen answer: I think her head was in the hat box after he dug it up from the garden where the dog was digging under the marigolds.
You are correct that it was her head.
raywest ★