For instance, if you have it faint or leave it in the pc box will it's happiness go down thus reducing return's power?
Yes it can still go down. Anything that dropped it can still drop it.
How to change your username How to add a user avatar Why was my post hidden? Question etiquette Flags vs Downvotes Anime FAQ Official PokemonDb League
Type a Pokemon name, type, move or ability to see instant results.