What can we do to help my great-grandmother with the people she's seeing who aren't really there?
If the hallucinations are not bothersome to her, you can go along with her "visions." For instance, if she says, "There is Uncle Walter," you might respond with something general like, "I’ve always liked Uncle Walter." Then change the subject. If the hallucinations are troubling or upsetting to the person, like seeing snakes, you might say, "Let's leave the room and I'll get rid of them."
When a person is in the moderate stage of a dementing illness, I like to "fix the problem," whatever that may be. You don't argue because what she is seeing is real to her. If the hallucinations are frightening and she cannot be calmed by your response, see a physician, who may prescribe medications that help to eliminate the problem.