Yes, the general unpleasantness of the Sackville-Bagginses and specific misdeeds of Lotho seem to have been treated as known by the hobbits. Maybe it's just a matter of Tolkien thinking he didn't want to be too detailed about the Shire goings-on during the great events of the War.
After all, he was concerned during initial drafts of the first chapters of what would become LOTR that the tale had "too many hobbits". It seems the reader is told just enough to know Lotho was a bad apple as far as hobbits went.
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