We study the dynamics of colloidal fluids in both unconfined geometries and when confined by a hard wall. Under minimal assumptions, we derive a dynamical density functional theory (DDFT) which includes hydrodynamic interactions (HI; bath-mediated forces). By using an efficient numerical scheme based on pseudospectral methods for integro-differential equations, we demonstrate its excellent agreement with the full underlying Langevin equations for systems of hard disks in partial confinement. We further use the derived DDFT formalism to elucidate the crucial effects of HI in confined systems.