My Dad talks about going home to see his mother. He says that she needs him to help her. He also talks about his siblings. Of the nine he only has one sister still living. I had to laugh one night. He ask about "Mom" and I told her she was there. I thought he was talking about my Mom/his wife. He looked at me funny and ask where she was sleeping. I said cluelessly, "With you." He looked at me with the strangest look and said, "I'm not sure she would be comfortable because she has never slept with one of her boys." Welcome to his world.
I agree with distracting about the death of a loved one and not repeatedly telling them that they have died. My dad's favorite brother committed suicide. Each time he ask about him mom tells him not only that he died but how he died and each time it upsets him. I just say "He's at home". In a way he is and it makes everything ok.
I agree with Martha that your Mom is seeing a person that cares for her when she calls you Mom. Is there a similarity in appearance between you and her Mom when she was young? Dad calls sister 3 by his sister's name from time to time but the resemblence between sister 3 and his sister at that same age is amazing. Generations get jumbled when you have no time reference and are regressing in memory. You Mom just knows that you love her and takes care of her. She is trying to fit you into where she is at the moment. Your loves comes through to her.
I do hope everybody has a happy 4th of July no matter where you are... and a happy 5th as well