Hi nipper,
It is so hard just getting our heads around what's happening to the person we love, but all these other situations are thrown at us and it is just plain bewildering. Sadly, it is even more bewildering for the person with dementia.
As Grannie G said, it can be very common, my dad has had Alzheimer's for 7 years and he spent many days wanting to go home, and, yes, he was in the home he built and had lived in with Mum for 40 years.
Trying to reason and get her to see reality could provoke an angry or upsetting response. Of course, it would, when you see something a certain way, somebody trying to convince you otherwise means you must be going mad, so you deny it. That's what I would do too. Try to do as Grannie G said, say things like, "It's almost dinner time, let's eat first and then I will take you." "It's almost dark so maybe we should just wait until morning." Delay the departure but always be happy to oblige and take her wherever she wants to go. Sometimes it works and other times it doesn't.
When Dad started this, he was quite aware and often knew he was being manipulated and it just angered him more. But it is worth a try and is much better than saying she is home, because that isn't what she is seeing.
Hope it works for you, keep us posted,
Stephanie