It's referred to as the "allure of nostalgia" in the wiki entry for Midnight in Paris.
There is a commonplace longing for the good old days.
For example, there is often a longing for the turn-of-the-century era (1900 not 2000) that is thought to be kinder and gentler than the later 20th century, as exemplified in Hollywood sagas like Meet me in St. Louis. A reading of some authors, like Stephen Crane's Maggie, Girl of the Streets, paints a much more realistic and somewhat brutal picture of that period.
As Ms. Simon points out, anticipation of what is to come may be ill-advised, since these are the good old days.
Saudade: It describes a deep emotional state of nostalgic or profound melancholic longing for an absent something or someone that one loves. Moreover, it often carries a repressed knowledge that the object of longing may never return. A stronger form of saudade may be felt towards people and things whose whereabouts are unknown, such as a lost lover, or a family member who has gone missing. Saudade was once described as "the love that remains"
I think you could easily say that they are reminiscing and being sentimental.
Freud, with deep introspection, would gather that there is a delusion of history. He is right.
I for one like the term:
romanticizing: deal with or describe in an idealized or unrealistic fashion; make (something) seem better or more appealing than it really is.