If everything happens in the brain, where are the memories? Why can't we decode them?
We're still not certain how the brain stores memories...it probably stores different sorts of memories in different ways and various brain areas. The hippocampus is especially important in retrieving memories; it seems to be the master cataloguer that governs access to them and also sees to it that they're stored.
As for 'where' memories are, my memories (as physical states) almost certainly reside within my brain inside my skull. I can't say exactly what form these physical states take...yet. But we're just starting to study the brain seriously. Wait a while.
I just believe in the idea that the more you know the more there is to know. I believe in things that are seen and unseen. I believe in dark matter. I'm a Mystic, but I believe that any sufficiently advanced technology looks like magic, or mysticism, if you will.