Some of these comments are really wrong, and I'll get to that in a minute.
I worked doing activities in a senior residential health-care facility, and let me tell you, there's hardly anything they're NOT interested in. As long as someone is engaged with them in a non-judgmental way, they will work or examine things for hours and are never bored -- because it's like they've seen the object for the first time!
If she is "sitting for hours in her wheelchair" with nothing to do you need to report this to the manager or go all the way up to the CEO or file a report with the state if necessary. All licensed facilities are required to provide a wide range of activities for all cognitive levels, even the most impaired. They are not supposed to just sit there or sleep the day away!
You might ask the activities director if there's anything special you can give her that she might share with the floor. Here's a list of things my wonderful folks with Alzheimer's/Dementia loved:
Fuzzy pillows in pretty colors
Koosh balls (they're fascinated with these)
Any kind of tote bag or purse with delightful things inside -- old-timey photos, costume jewelry, fake flowers, plush dogs and cats, "beach" stuff -- beach balls, suntan lotion
Boxes from fancy stores of different sizes that they stack up, talk about with each other, and wrap as gifts
Nail polish and hand cream! Oh boy do these ladies love a manicure!
And especially, you called it, music. There are CD players with large buttons, make sure you provide batteries and give extras to the nurses station. She can carry that on her wheelchair. I bought lots of iTunes for my seniors, and burned discs for them. One lovely lady loved French Christmas Music, I burned a whole load of Tito Rossi, etc. You may even remember some music she might have liked as a younger person.
Some of the comments here remind me that the biggest problem we had on the job was not with the Alzheimer's residents -- it was with their family members. They would get their Mom all upset by insisting "No you are NOT a girl of 16, you are an 80-year-old woman and I am your daughter. DON'T YOU REMEMBER?"
JHS:
"but there are no "favorites", and she quickly lost the ability to recognize anything having to do with her life or her family -- vivid advertisements are more interesting to her than her wedding pictures, or her grandchildren. "
Yeah, JHS, because she is really good at what she does -- which is having Alzheimer's. But this comment is typical. Family members just upset them by trying to force the issue.
But it doesn't mean you get to give up! The relationship changes as the brain peels off the layers of years, and it's actually fascinating to discover this living time machine in action. We who work with Alzheimer's residents (and LOVE them

) accept them at whatever level and developmental stage they are in -- one day Gertie is 4 and she's sticking her tongue out at me, one day she's waiting for her son who will pick her up from work and she needs her purse (son has been dead for decades), you just never know what you are going to get. I just loved them and accepted them at every stage, and sometimes they even remembered me! And even if they didn't I loved them anyway. That's why I always had a very full, happy and busy participatory program -- people with paralyzed feet kicking a beach ball and laughing, ladies painting pictures for me and trying to write their name on it (ooooh), folks dancing to Glenn Miller (some of them won't stop dancing), and reading and massaging the hands of those with the most severe decline.
PA Mom, good for you. Your grandma is going through a transition phase. Sometimes they "wake up" and these moments of awareness can be terrifying. I highly recommend:
Local Chapters
Good luck and have fun buying gifts for Grandma! She will love 'em.