Two owners of the Kiss club were arrested, along with a pair of musicians who starred in the ill-fated pyrotechnic show blamed for sparking Sunday's tragedy in the university town of Santa Maria in the south of the country.
President Dilma Rousseff pressed mayors across the massive South American nation to ensure that such a "terrible tragedy never takes place again."
The president, who rushed back from a regional summit in Chile to meet with grieving families, called the pain she had witnessed "indescribable."
The inferno, described as the second worst in Brazilian history, forced the cancellation of an event to mark the run-up to the country's hosting of next year's football World Cup, the biggest global sporting event.
The fire broke out at around 2:00 am (0400 GMT) Sunday in the club, which was packed with students. Survivors said the band's vocalist lit a firework that may have triggered the blaze.
While friends and family members bid farewell to their loved ones, officials revised the death toll down from 233 to 231. Health minister Alexandre Padilha said 75 more were in "intensive care... and are in some danger of dying."
"We think the most plausible cause of the fire were the pyrotechnics used by the band, which released sparks and set the roof alight," Police Commissioner Sandro Meinerz said.
As distraught mourners laid wreaths outside the scene, police official Michele Vimmermann said club co-owner Elissandro Spohr and two members of the Gurizada Fandangueira band had been detained.
A second club owner, who has not been named, surrendered to police later in the day.
Meinerz said the club had not had valid operating permits since August and that its emergency exits led only to the main entrance, which became a deadly bottleneck.
Most of the victims died of smoke inhalation in their desperate bid to escape.
In a statement to police, Spohr acknowledged that the club's license had expired, adding he had requested a renewal. He also blamed the band for the incident, according to the Globo G1 website.
The band however denied responsibility and said their accordion player was among the dead.
"We want justice, we're not to blame for anything," band member Rodrigo Lemos Martins told G1.
Spohr denied witness accounts that he had ordered security guards to block the club's exit and that he had removed a computer -- which Meinerz said had disappeared -- with security camera footage.
As dawn broke, mass wakes for 24 of the dead were held at the town's sports center. As a somber silence hung over the gym, the family of Luis Dias Oliveira draped a flag over his coffin, their eyes swollen and red from crying.
In one of the many urns were the ashes of Joao Carlos Barellos da Silva, who ran a website about the parties at the club. His lifeless body was found in a restroom.
"He was a wonderful son. I have never felt such pain," said his mother, Gelsa Ina Barcelos.
Like Da Silva, about 180 people perished in the restrooms, suffocating amid the chaos as they tried to find the exits, according to military police captain Edi Paulo Garcia.
At a cemetery in Santa Maria, Juliana was in a state of disbelief as she attended the burial of her brother, Heitor Oliveira, saying: "Why? Why?"
Survivors recalled a night of mayhem.
In a black cloud of toxic smoke, panicking clubgoers trampled each other in scenes reminiscent of a "horror movie," 21-year-old Kelly Rebello de Silva told AFP.
"It's very sad. I lost 13, 14 classmates," 22-year-old Felipe said.
In Brasilia, authorities called off a planned event dubbed "500 Days until the World Cup" but the secretary general of football's governing body FIFA, Jerome Valcke, insisted security plans were on track for the event.
"What happened is the most horrible thing that can happen," Valcke told reporters.
"However, it has nothing to do with the security within the stadiums," he said, ahead of the Confederations Cup to be held June 15-30 and next year's World Cup.
"We have an emergency plan in place to evacuate a full stadium within eight minutes," he added.
A spokesperson for the International Olympic Committee said: "We do not doubt that Rio 2016 will offer a secure environment for the fans, athletes and those working for the Games."
Brazil is scheduled to host the Summer Games in August 2016.