they do remember...remember when sora and the gang met Jazz again (despite the fact that they bowed, which might not mean an introduction, but a formal greeting...like "nice to see you again pricess jasmine" donald says as he bows...), she giggled and started to wave, and donald hugged belle and i find it that belle hugged him since donald seemed to flail his arms wildly appearing to break out of the embrace...so most likely, they do remember...the glass cases are probably used to keep their bodies so that they don't disappear