In brief:
We haven't really found the answer to that yet, to be honest. There are certain brain regions, like the hippocampus, that when damaged, lesioned, or hijacked by the HPA axis effect a perturbation of memory formation or recall. According to the most prevalent current theory on how associations are stored, neurones or small clusters of neurones may somehow convey the recall of a memory through synchronous activation; hippocampal damage interferes with cortical capacity for recall of the type of memories the hippocampus specializes in helping learn. More recent findings that some glia respond to neurotransmitters may indicate glia also have some role to play in cortical functioning as well. There have been some attempts to identify the structure of cortex-wide neuronal pathways, but to my knowledge no theory is yet accepted by the field as a whole.
In a bit more detail:
The hypothalamo-pituitary adrenal axis, involved in stress response, effects an increase in the synthesisation of cortisol by the adrenal glands of the kidneys, which helps the body respond to a threat by decreasing immune function and increasing the amount of readily available glucose. Its operations begin with a(n environmental) stimulus, which is relayed to the hypothalamus by the amygdala and various other inputs. The hypothalamus then secretes CRH (corticotropin releasing hormone), which is received by the anterior pituitary gland, which secretes ACTH (adrenocorticotropin-releasing hormone), which is picked up by the adrenal glands, which secrete cortisol.
The process is halted (inhibited) by the hippocampus; it has a large number of glucocorticoid receptors (GR), which are all over the body, but particularly on the hippocampus. The hippocampus plays an important role in memory formation - specifically short-term memory (STM) and context-heavy memories; if you can't form a memory short-term, long term memory thus is also affected. The GR of the hippocampus, when activated, hijack the structure's normal processes; GR are activated by cortisol. GR are proximal to the parts of the hippocampus critical to its function in memory, so when GR are activated, the hippocampus can't quite execute those functions properly. Keep in mind, though, that it takes but an infinitesimal amount of time for GR to process cortisol; afterwards, the hippocampus signals the hypothalamus to stop producing CRH (the hypothalamus is inhibited), ending the cycle. Only when GR are hyper-active, when the blood contains an exorbitant amount of cortisol, could function of the hippocampus be hindered. Rather more often the case GR are over-activated by excessive and persistent levels of cortisol in the blood, leading to their failure - as they are part of the hippocampus, the structure itself degenerates and loses volume. This is chronic stress. Degeneration of the hippocampus effects a decrease in one's capacity for STM and recall of context-heavy memories.
I describe the HPA axis to show how we know where associations are created. When the hippocampus cannot exercise its role in memory formation and recall, synchronous firing of both newly allocated and recalled associations (neurone clusters) cannot occur; thus perturbations of memory result. On an fMRI scan, one would seen two (or more) spatially separated regions 'light up', signifying increased blood-oxygen flow to, and thus increased activation of, those regions. What do these associations look like on the cellular level? Right now that depends on your imaging techniques. No definitive answer to that question has yet been accepted by the field.
Research on OCD (which is an addictive behaviour) has found that the neuronal pathways in regions related to addictive behaviour (like the Ventral-Tegmental Area) have more activation - are more brightly lit on an fMRI scan - than in humans without OCD; id est, the pathways are more like an interstate than a country road (not my analogy). The more one indulges the OCD-associated behaviour, the theory then goes, the broader the pathway becomes.
*We refers broadly to humans, and specifically to neuroscientists.
Thanks for the thorough reply.
I guess what I'm getting at though is, if we can't point at something & say, "This is an association. It weighs 5 grams & consumes 0.5% of the brain's energy", then how do we quantify an association? Are we referring to behavior? A subjective feeling? A concept? What?
Disclaimer: The following is but a brief clarification on what the human brain does when one's behaviour is reinforced or punished. Thorough, exhaustive, and scholarly it is not.
Summary: Punishment, reinforcement, etc. of a behaviour creates an association in the mind of the affected party between the behaviour and the corresponding punishment, reinforcement, etc., the nature of which can only be known by the affected party. Take care when reinforcing or punishing others, as you may be effecting an unwanted association.
I've noticed the behaviourist concept of reinforcement thrown around a great deal on this site, and am worried a fair number of those who frequent it develop a misconception or are simply ignorant of how reinforcement affects humans' brains, and why it is practically effective.
In the interest of time, I'm not going to go into much detail on classical black-box behaviourism and behavioural neuroscience; Luke already covered the how one can take advantage of positive reinforcement. Negative reinforcement and punishment are also important, but won't be covered here.
The Couple has a three year old son. They are worried their son ingests too few and poorly varied micronutrients. They want their son to become a world conqueror someday, so a poor diet just won't do. Their son loves DragonBox. Every time they all sit down for a meal, their son will barely consume anything, so eager is he to play more DragonBox.
He also very much likes Dragons.
The Couple decides in favor of serving their son a balanced meal consisting solely of micronutrient dense, bioabsorptive foodstuffs. They tell him, "Spawn, you must fletcherise and swallow all that is on your plate if you wish to play more DragonBox." The son understands, and acts accordingly; he eats all that is put before him so he may DragonBox.
What happens in the mind of The Couple's son when he is told thus? His brain creates a new association, or connexion, of concepts[2]; in this case, 'eating all that is put before me' becomes associated with 'more DragonBox!' Perhaps, though, he associates 'more DragonBox!' with a different concept: 'eating green things', say, or 'eating brown things'.
In other words, one can never be certain of the precise association another creates when they are reinforced or punished.
I think I can make this explanation clearer.
Once a man named Watson wanted to investigate whether he could make a child fear something the child would otherwise not fear. He took a fluffy white rat, put it in front of a baby, Little Albert, and created a loud resounding metallic gong of a noise. After a while, Little Albert came to associate 'loud scary noise' with 'fluffy white thing' - not 'fluffy white rat'. Afterwards, when presented with a fluffy white bunny, dog, and even cotton balls, he displayed a fear response.[1]
Humans are constantly creating associations between anything that can be conceptualised - the color indigo, Herrenhausen, toothpick collecting - anything. When one is forced to link one concept to another, through any means, an association is created; one can never know with certainty the nature of another's association.
Be careful when using reinforcement and punishment on others. Ever be diligent.
[1] This is called a generalised response in psychology; look into fear learning of the amygdala if keen.
[2] Vide
[3] Richard Kennaway provided a quote epitomising this concern, and further elaborated upon it admirably.