So Michi don't just failed to remember the previous Obon Festival, she also seems to failed to recognize the exorcist, and she was close to remember something about Aizawa when she went to talk to her. But it don't look like she have forgotten a lot of her life's memories.
My take is that she meet the exorcist once for a formal exorcism, to stop seeing ghost or to have some knowledge about her condition, or because she was haunted at the time. If she has learned the hard way that ghosts are scary, it's OK to suppose she had been exorcised at least once. And she didn't recognize the exorcist because she just forgot normally, while the exorcist remember her because of the second little Michi in dress that seems to haunt her is something uncommon.
And for what happen during the festival, the little girl crying may be the little Michi in dress that seems to haunt her.