she really sounds like its highly probable that she has some sort of psychosis, and probably schizophrenia - she has many of the classic symptoms, delusions, paranoia, and the sleeplessness and random writing.
I recommend you try to get her for a good early psychosis evaluation center as soon as you can. The sooner she gets help, the better the outcome would be. Here is more info on these centers:
Also - I recommend you read this “First Aid for Psychosis” writeup on how to interact with people who are psychotic:
http://www.schizophrenia.com/sznews/archives/005561.html
More on the common symptoms of schizophrenia:
and personal stories from people whose family members developed schizophrenia: