The whole reason the Aladdin characters are in the Morocco Pavilion is because of their association with Islamic culture. It is a larger, shared culture. Morocco may not be in Arabia, but it is part of the Arab world. The country is a member of the Arab League, Arabic is an official language and the ethnic composition of the country is 99% Arab-Berber. Nothing about the Disney film specifically invokes Iraq, so your claim of cultural sensitivity is ignoring centuries old cultural connections across the Islamic world in favor of a 20th century British political boundary.