What does it mean that memory is described as something "non-realistic," something "seated predominantly in the heart" in The Glass Menagerie?

The scene is memory and is therefore non-realistic. Memory takes a lot of poetic licence. It omits some details; others are exaggerated, according to the emotional value of the articles it touches, for memory is seated predominantly in the heart. The interior is therefore rather dim and poetic.

The quoted phrases referred to are taken from this quoted passage of the introductory remarks in the stage directions prior to Tom's first entrance in the script of The Glass Menagerie. Tennessee Williams is describing his vision and philosophy of what memories are. Some might disagree with the prevalent philosophy that memories are "seated in the heart" and "non-realistic" and therefore "dim and poetic." However, this is Williams philosophy and the philosophy he ascribes to Tom, his foremost character and narrator.

Williams idea of memory is the modern idea that memory is a thing that is half fantasy and half reality; that it is something we unconsciously alter to fit our unconscious desires and fears. This modern idea of memory does not accord with historic reliance on memory such as when in ancient times oral story tellers were trained by masters and until recently school children were made to learn lessons and recite them from memory. But it seems Williams refers to another kind of memory, the kind that is clouded by regret and unfulfilled intentions curtailed by overpowering burdens.

Williams is describing his philosophy of the kind of memory from which The Glass Menagerie is drawn as something that is more emotional than cognitive ("seated ... in the heart") and something over which our emotional relationships throw a veil or a cloud ("rather dim and poetic") so that they are seen as vaguely etched and imprecise and as colored by the people contained within them: mothers, sisters, fathers, friends. Since Williams' idea of memory in this play is defined thus, it can be called "non-realistic," or contrary to reality, meaning that some perceptions are altered or misshapen, perhaps altered and misshapen for the better, perhaps for the worse ("omits some details; others are exaggerated, according to the emotional value of the articles it touches").