You're not any closer to your neighbor in the Finding Nemo ride than you are in Soarin' over California.... My husband and daughter both seem to get concerned about being in an enclosed space for rides, but did o.k. for this one... though, my 5 year old did seem a little more bothered by the 'sub going down' when they show the display of bubbles to indicate you are going 'down.' You can always look up, our of your window, and see the surface of the water above you - you are NOT in deep at all.
Also - the seats were very roomy I found - I didn't feel pressed up against my neighbor at all.
One more thing - I find myself feeling far more claustrophobic going shopping with crowds {the type of crowd where you can't maneuver a cart, etc.} to be far worse than this type of feeling.
I didn't know there was an observation deck - for those wondering if they can handle the ride, it may be a good idea to try that - I didn't find the ride to be worth going on more than once. Special effects were cool, but we all didn't really care to ride it again. (We didn't have that long of a wait, we rode it one hour prior to the parade start time.)
Good luck!!! I should also add -it was very LOUD for our 5 year old. She loves rides like PotC and BTMR but this proved to be too loud, I think, in the end, for her.