Ach, Rowling. I doubt there is another author whose inattention to hir characters and world inspired more conspiracy theories among his readership.
Besides Slughorn Lily is only mentioned by Ollivander, who remembers her wand (this reminds me of a Snarry fic where due to side effects of a complex protection by Dumbledore and Harry keeping Voldemort's wand in his home nobody but Severus can remember who Harry is; Ollivander still recognizes his wand and knows to whom he sold it, but can't recognize Harry himself), by Hagrid - always in tandem with James and is mentioned by several characters in POA in the context of discussing the events leading to the Godric's Hollow attack - again either as 'the Potters' or as 'Lily and James', and by Sirius and Remus in OOTP in the context of the discussion of SWM. They mention her disapproval of James' bullying, James hiding the continued bullying of Severus from her and the timing of her and James' dating.
Hmm, by the time of the confrontation in the Shrieking Shack in POA Sirius did not get a chance to be affected by your proposed memory modification, unless Dumbles bothered to go to Azkaban to apply the spell (but not ask him about the Fidelius business). Yet he doesn't bring Lily up either.
Besides Slughorn Lily is only mentioned by Ollivander, who remembers her wand (this reminds me of a Snarry fic where due to side effects of a complex protection by Dumbledore and Harry keeping Voldemort's wand in his home nobody but Severus can remember who Harry is; Ollivander still recognizes his wand and knows to whom he sold it, but can't recognize Harry himself), by Hagrid - always in tandem with James and is mentioned by several characters in POA in the context of discussing the events leading to the Godric's Hollow attack - again either as 'the Potters' or as 'Lily and James', and by Sirius and Remus in OOTP in the context of the discussion of SWM. They mention her disapproval of James' bullying, James hiding the continued bullying of Severus from her and the timing of her and James' dating.
Hmm, by the time of the confrontation in the Shrieking Shack in POA Sirius did not get a chance to be affected by your proposed memory modification, unless Dumbles bothered to go to Azkaban to apply the spell (but not ask him about the Fidelius business). Yet he doesn't bring Lily up either.