The degrees-of-freedom (DOF) of the multiple-input multiple-output (MIMO) channels in indoor environments is studied by considering the electromagnetic (EM) propagations in rectangular cavities. The cavity walls are made either lossy or losses, and hence the effects of losses are examined by comparing the two cases. It is found when the system is lossless, it is possible to continuously raise its effective DOF number by packing more and more antennas in fixed communication volumes, and this can be done to an extent that is far greater than allowed in the lossy system case. Additionally, the performance improvement of multi-polarized MIMO systems over similar uni-polarized ones are also investigated. Unlike the polarization gain suggested by an existing research, the results from this work show that the practically obtainable benefits from the EM polarizations are actually higher, and also vary with the system operation conditions.