Ground State - S4-E2
Revealing mistake: In 'Ground State' when Gwen is walking towards the lift in Irwin's building you can see Angel's reflection on the shiny door. Vampires don't have reflections, as is demonstrated at various other times in this show.
Ground State - S4-E2
Factual error: In the flashback to Gwen as a child in 1985, she is dressed in a jacket tagged with an "Old Navy" zipper. That clothing store chain wasn't founded until 1994.
Answer: Everybody including Angel saw her. After helping them and then being left alone to talk to Angel, Cordelia says that the Powers That Be let her come back one more time to help them. After Angel gets a call saying that she died, he realises that it was her spirit that was helping them the entire time.