Well, let me help you out a bit with this. You are actually right - nostalgic is the best adjective to describe the mood of this great story. Now, in my dictionary, nostalgia is defined as "a yearning for past circumstances or events". As we read the story and are thrust in to a winter morning twenty years ago, as the first paragraph tells us it is clear that the title of this story is precisely what we are presented with - a "Christmas Memory." Note how attractive and idealistic the setting is, in spite of the challenge of the narrator and Queenie to get the ingredients and send off the cakes. Capote creates amazing descriptions of what the setting was like that shows his love and attachment to his past, such as this:
Morning. Frozen rime lustres the grass; the sun, round as an orange and orange as hot-weather moons, balances on the horizon, burnishes the silvered winter woods. A wild turkey calls. A renegade hog grunts in the undergrowth.
These are memories that the narrator looks back on with great fondness and love as he remembers his childhood. However, note too that the mood changes towards the end, as the narrator tells us of the inevitable passing of time, how he grows up, and how Queenie dies. This gives the mood a somewhat bitter-sweet feeling, as we are made to enjoy and love the description of this Christmas preparation, so long ago, whilst at the same time being forced to admit that these idealistic times do pass inexorably and they become nothing more than a memory in our lives.