Hi, Kerstin, and a warm welcome to Talking Point. I'm sorry to hear about the difficult situation with your MIL and while we are glad you found your way here, we are sorry you had to, if that makes sense.
I agree that everything you describe is very common with dementia. Maddening and trying and difficult, but definitely all very familiar, for what that's worth.
Everyone with dementia is different, and not everything works with everyone all the time, but generally speaking, I do find the compassionate communication guidelines to be helpful. Learning about dementia and how to deal with it (my mother is 75, has Alzheimer's and very poor short term memory and also does the "loops," but not as bad as your MIL) was a VERY steep learning curve for me and I feel like it took me a lot of time, a lot of research, and a whole lot of support from TP and my local support groups, to begin to get a handle on it. It's not easy.
Humour definitely helps, if the PWD (person with dementia) responds well to it, and the right comment at the right moment can help to break a loop, or flip the mood to something more positive. My mother always had a keen sense of humour so this approach often works with her. Learning to go with the flow, which does not come naturally to me, is also something that works with my mother, as does pretending that I can't remember things (she loves that), avoiding issues I know will trigger upset/anxiety, and a lot of the compassionate communication suggestions. It can be really difficult not to argue or point out the logic/illogic of something, but it never helps with my mum, so I try hard not to do this. Easier said than done, like a lot of things with dementia!
I often think that training in acting, and improvisational comedy, would be a great help in dealing with a person with dementia.
A lot of people have trouble "lying" to their PWD, for a variety of very understandable reasons. I look at it this way: what is going to be the kindest thing I can say/do, for my mother and her well being? Is telling the absolute/entire/direct truth, going to be kind and have a positive outcome? The answer is almost always no, it will be unkind, upset her, and possibly start one of her dreadful anxiety/distress loops. I would do anything to avoid distressing my mother, so I lie. I lie cheerfully, I lie constantly, and I tell her what will reassure her and make her happy.
I actually never had much trouble with this, but as I said, many do, and it's understandable. Many of us were taught to be honest and truthful and we want to be that way with our parents, and if they were still themselves, we wouldn't lie--and wouldn't have to lie. Unfortunately, this horrible disease brings a lot of changes and destruction, and not just to the person with the diagnosis.
What I find challenging is to resist the urge to have a "normal" conversation, you know, where I might talk about myself and what I'm doing and things going on in the world. It's been several years now since my mother could cope with that sort of thing, so I just follow her lead and I know that when she asks how I am doing, I tell her "I'm fine", and when she asks what I am up to today, I tell her "nothing much, just the usual," as those are the only answers she can process/cope with. She needs everything to be okay, and to not have things to worry about, so I make sure I tell her it's all okay and there is nothing she needs to do.
If your MIL does need a wheelchair or anything else like that, you don't have to be the one to tell her. Get her GP/doctor to tell her, or a staff member. Blame it on the doctor, or say she just needs to use it "for a while" or "until the doctor says so" or "because it's the new policy; I know you don't like it but it's just for now" or whatever will be less upsetting for her. Always, always deflect blame onto someone else, never yourself, and never be the messenger.
Best wishes to you and hope you find TP helpful and supportive.