Does Yamato come back?
Short answer: Yamato is alive and was released from the trap he was in during the war. His current job is keeping constant watch over Orochimaru.
What happened to Captain Yamato?
He survived. In 699 you see him emerge from the Infinite Tsukuyomi. Spiral zetsu is near him and tries to grab him again, but the zetsu quickly falls apart (presumably it died).