Mother makes up stories in her head and talks them out loud. Any insight?

My mother, whose 74 years old, became unable to live by herself due to some falling issues. As a result, I moved her in with me. She is still able to get around to fix her own meals and take care of her physical needs and I rarely have to assist her. She stays in her room 99% of the time entertaining herself on her computer, watching TV and listening to music. Since I have moved her in, I've noticed she talks to herself non-stop. She makes up stories in her head and talks them out loud playing different characters. If she thinks I'm listening, she stops, or when I confront her about it, she admits that she likes making up stories in her head. Her memory and social skills seem fine. A couple of rare occasions she has blurred her stories with reality when I was talking to her. I took her to her PCP a few months ago and he discovered she had a UTI and prescribed some antibiotics. I know UTI can manifest itself with mental confusion and after taking the round of pills, that seemed to clear up and she hasn't blurred the lines since then. I've listened outside her door and sometimes her "characters" become violent. She watches lots of movies, so I don't know if that plays a role or what. I don't think this is "normal aging" behavior, and I sometimes worry that she might blur the lines again and act out some of the violent acts she talks about. I've tried researching her condition online and it doesn't seem like dementia since she shows no other cognitive decline. I'm starting to believe she has developed some sort of personality disorder. I'm not sure at this point what to do. Any insight or advice would be appreciated?