The moodlets effect what was called the aspiration level in TS2 (the vertical green or yellow bar) for the duration shown under the moodlet, so yes short term memories would be an appropriate description.
Actually, it is more of a relocated mood bar (hence moodlets), and it replaces two non-critical needs of a sim (environment, which effectively still functions the same, and comfort, which is no longer chargeable.
And, I hope I am not getting this wrong, but it either effects a change in the mood or affects the mood. The mood is not solely caused by moodlets, although they are a deciding factor.