Question: How is it that Tootles still remembers everything about Neverland and Peter really being Peter Pan, but Peter completely forgets everything about it and his true identity?
Answer: Tootles suffers from dementia, dementia turns old people back into children. The final scene is Tootles dying and going back to Neverland. Yes, it makes that scene infinitely harder to watch without crying.
Tootles did not die as everyone saw him flying back to Neverland after Peter gave him back his marbles.
Tootles didn't die as Peter, Moira, Jack, Maggie, Wendy, and the housekeeper watched him fly out of the window after getting his marbles back. Even the people who were kissing on the bridge unknowingly began to fly after Tootles flew past them.
Answer: It's not specifically explained, but it's implied this was subconsciously voluntary on Peter's part. After falling in love with Moira, Peter decided to leave Neverland forever to stay with her in the real world. As time passed, all memories of being Peter Pan were completely suppressed, probably so he would not be tempted to return. The memories had become so deeply buried that it took much encouragement from others for him to unlock them.
raywest ★