In general, we don’t stay in other peoples’ homes either. My D’s inlaws always stay with them on an inflatable mattress, all sharing one bathroom for days at a time. We do not. We want and require more privacy than that (DH had extensive colon cancer surgery-he doesn’t have a colostomy bag, but suffice to say that nonetheless he has privacy requirements that make anything other than a separate bedroom and ensuite bathroom a non-starter).
As to the OP’s scenario, I don’t think there is one right answer here. It really depends on the specific family dynamics. We don’t kick our kids out of their own bedrooms, but if it were a given that an elderly woman was going to stay with us, I’d likely give her the bedroom. But that doesn’t really mean anything really, because I’m not the OP with her unique situation.