Not sure about family members forgetting the identities of the ones they lost, but like Rhostel said, identities seem to be the only thing people forgot with regard to the Calamity. The destruction was very real, and at the least people seem to remember that Dalamud fell. (I think I remember an NPC mentioning it. I think. I'll search for that again.)
"Melle. You know, like what bears do!"
