Open interest declines for three reasons:
Since it expires today, I know for sure it hasn't expired yet. So some of the open interest must have been exercised, which means somebody sold short for $800, which means somebody else bought the underlying at $800, fulfilling the option contract.
My question is: why is this trade not reflected in the underlying's price history? There should be a spike (or various spikes) of $800 where these contracts were exercised.
There are no $800 transactions on the stock exchange when options are exercised. Satisfaction of the option contract is between two counterparties and is at $800. The shares are delivered from A to B or from B to A depending on whether it was a put or a call exercise.
Suppose A is short the $800 put and it's owned by B who exercises the contract. If B owns 100 shares, he sells them to A for $800 (an off exchange transaction).
If B does not own the shares, he can go short if shares are borrowable from C which he then delivers to A. If shares are not borrowable or B wants to close via this exercise, he buys 100 shares on the market (an exchange transaction at GME's current price of $225).
Secondarily, note than if option exercise results in one of the counterparties going to the exchange to buy or sell shares to satisfy the assignment or exercise, that contributes to moving the underlying's price since it's a stock exchange trade. However, this stock volume is small in size since put and call induced stock trades offset each other to some degree and it's miniscule compared to GME trading 50 to 200 million shares a day.