A few memorable moments for me that year were:

1) DH’s Williams being covered in oil from JV’s Williams after he ran wide in turn 1.
2) Schumacher’s final lap in Imola where his right front wheel wouldn’t turn or after qualifying on the Saturday where his suspension broke
3) Schumacher’s formation lap engine failure in France
4) Schumacher’s incredible Spanish GP drive – showcasing his skills and teaching the rest of the grid a lesson on how to how to drive in the rain along with his two wins in Belgium and Monza.
5) JV winning in Nurburgring that year. His first F1 race with Schumacher hunting him down right to the end, quicker, just not having the grunt in the Ferrari to pass him.
6) 1996 Monaco GP – only 6 finishers if I remember correctly. Schumacher made a stupid uncharacteristic mistake in that race as well on the first lap iirc. Olivier Panis’s only win.
7) Finally, of course, and as already mentioned, JV's pass on Schumacher in Portugal in a fantastic move.
8) What I missed most after the 1996 season was the loss of Ben Edwards and John Watson as a commentary duo. It was great.

It was pretty obvious, with Schumacher’s move to Ferrari that year, that Damon Hill was going to be WDC but at least JV kept him honest throughout the year and made it somewhat interesting.