From your photos and description, it appears as though this unit has had some significant damage due to leakage. Leaks in RV's are not uncommon but can be prevented, in most cases, by careful watchful inspection and regular maintainence. But it is too late to speak about what might have or should have been done. Water can come in through windows, roof vents, exterior lights, slides, and a variety of other places. It can enter in one place and travel to other parts of the camper. A cursory inspection of the roof and sides may not be enough to pinpoint exactly where the leak is.
As far as what to do, that is a dilemna. In its present condition, you won't get much if you decide to sell or trade it in. Not many people would want to purchase it as it is now. If you decide to go ahead and repair it, you should have some idea as to the extent of the damage and cost of repairs. You might want to take it in to a reputable RV repair center and get an report of the damage and an estimate of how much it will cost. Is there any work that you can do yourself? If you are handy, perhaps the costs can be kept down somewhat by doing all or some of the work yourself? The damage may be confined to a small area as you described but there may also be widespread dry-rot beyond what you can see.
I don't have a lot of answers for your grandmother's situation - it is not one that I would want to find myself in. Perhaps other members will be able to offer some better direction and advice and will post their responses.
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2008 Cougar 5th Wheel 27RKS
2005 2500 GMC Duramax
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