What is really going on in our two-bottle systems?

Fifth graders are trying to make sense of what is going on with the water in their two-bottle systems.  They know it's not escaping since the system is closed.  How does the temperature of the light affect the water?  Is there invisible water somewhere?  If so, where?  How does the temperature affect the size of the water droplets?  

We're making sense of all this...

And by the end of it, we'll know how evaporation and condensation are related!