I think they did see Jesus ascend. But does that mean that Jesus is floating somewhere in the material universe? No, I don't think that's what Jesus' ascension means, that's not what it meant two thousand years ago and it's not what we mean today.
The Ascension is about the Enthronement of the Messiah, whose Throne is at the right hand of the Father "in heaven". So we confess and believe that Jesus Christ is seated at the right hand of the Father. But it would be incredibly errant to think God is seated on a literal chair "somewhere up there".
To that end the most important meaning of "heaven", is that it signifies the power, reality, and authority of God. So we read, "The heavens are My throne, and the earth is My footstool" in Isaiah 66:1. We see that "heaven" is used to signify God, such as where the terms "kingdom of God" and "kingdom of heaven" are the same.
So the point of Jesus' Ascension, His ascension into the heavens, is about His taking His seat at the right hand of the Father. It's about the exalting of the Christ, such as we read, "So God has highly exalted Him and given Him the name that is above every other name". Such also that we read in the Acts of the Apostles that God has made Jesus "both Lord and Christ". It's what we read about in the vision of Daniel concerning the Son of Man taken up in clouds before the Ancient of Days and being given power and everlasting kingdom.
Did the disciples see Jesus physically taken up? Yeah. What exactly did they see, what precisely this all looked like, we don't know. But Jesus was taken out of their sight, and then is seated in glory. Any attempts to speculate beyond this gets us into all kinds of unnecessarily wacky and near certainly wrong ideas.
I confess that the Incarnate Son of God, Jesus Christ--body, soul, and divinity--lives and reigns at the right hand of the Father and fills all things, and whenever the Church comes together to receive the Holy Eucharist, Here that same Jesus is really, truly, literally found. So that the bread and wine is truly, physically and spiritually, the flesh and blood of Jesus Christ. The same body that was conceived in Mary, that was crucified, that died, and that came out of the tomb, is the body of He who fills all things. How can this be? Only God knows, and yet yielding my conscience to the word of God I am compelled by Christian faith to confess this--and this I do joyfully and believing fully in these mysteries.
-CryptoLutheran