Mother-in-law Hell

I am at a loss on how I can be sane in our home with my mother-in-law. My husband and I have been married for 18 yrs. She cannot live alone because of lack of finances and mental instability. When I say mental instability I mean she truly does have paranoia and hallucinations, it is not a ‘daughter-in-law’ dig.
Here are the problems:

1.  She has told us on several occasions that the neighbor or a member of my family has said ugly things to her that I’m sure never happened.
2. She has very poor hearing so this enhances the paranoia and she will often think we say things or the children say something that none of us would think of saying. I have ask my husband to gently talk to her about a hearing aid so she can at least hear the kids but he has not done so. Any suggestions?
3.  She will wait until she runs out of cigarettes or medicines and then try to manipulate us into getting them immediately. Usually it is right after I’ve come back from an errand when I could have easily stopped to pick them up. She has made my husband miss family events because he won’t tell her he can’t stop on the way home from work. His answer is to get her 4 cartons but will that change the habit of waiting and not considering the family plans or needs? I think if she has to go without cigarettes she might remember next time am I wrong?
4. She will complain about needing her hair cut or needing a doctor’s appt but will not take the initiative to make the appointment and if I make it she will often ask me to cancel the morning of the appointment. This is after I’ve scheduled my things around her.
5.  She loves to garden but constantly ask me to order the flowers. I work from home and I have two kids and a husband who works about 60 hours a wk. I do all the housework, all the finances, all the kids stuff and I’m starting a small business. I do not have time to order her flowers, make her appointments, and GROCERY shop for her. She will often ask if she can go to the grocery store with me and I’m happy to have her go. I will work it around her getting up at 11am but then she won’t tell me she’s decided not to go until noon and then she will ask me to pick up her items too. How can I get her to do more of her own stuff? She acts like she’s being mistreated if I say I can’t do something she’s ask.
6.  Lastly my mother-in-law reads anything lying out including my planner, my b-day cards, notes to my kids, things she picks up in my 13 yr old son’s room.

Any advice on how I can get her to take care of her own stuff. If I try to get her to do her own scheduling or shopping she acts like I’m persecuting her. Once I told her I would not be able to pick up her medicine (could get next day) she actually told my mother that she was just shaking because she was out of her medicine. HELP.