How much of our memories is just wishful thinking?
Memory makes us. If we couldn't recall the who, what, where, and when of our everyday lives, we wouldn't be able to function. We mull over ideas in the present with our short-term (or working) memory, while we store past events and learned meanings in our long-term (episodic or semantic) memory.
Quite simply, cognition refers to thinking. There are the obvious applications of conscious reasoning—doing taxes, playing chess, deconstructing Macbeth—but thought takes many subtler forms, such as interpreting sensory input, guiding physical actions, and empathizing with others.