I worked in nursing homes for years. I love your ideas about the dolls. The ladies treat them just like they are their children and give them much love and care. It gives the ladies a reason to live,someone to care for.
My only caution is to check with the nursing home and make sure they allow it. I worked in one where it was not allowed. Everything taught was reality--it didn't work. Once they get to this point you are not going to teach them anything different from what they think. I say keep them safe, comfortable and happy.
I wish you good luck with this.