You may want to use a curtain, room divider, or screen to create privacy from the lounge area.

Is this your mother's layout at present?

This may be cost prohibitive but a glass surround with drapes as shown in the inspiration pic could be a solution.

Where is the entrance door? Where is the closet and the bathroom door?

Possibly this solution could be more budget friendly with rods and curtains surround

Is the room you posted the studio she is moving into? Confused, as this layout looks great. Maybe add a small apartment sized sofa.

Hi everyone, thank you for your help with this. The picture I posted is of the display studio from the company brochure. I like the idea of the curtains as an option for potentially hiding/blocking the bed from the living area. Creating a feeling of space while creating a division of areas are the 2 key things we are looking to do.

The layout of the bathroom and cupboards are like a hotel. Once you open the door the bathroom is immediately to your left and the cupboards for clothes on your right.

:)

Where is the entry door?

A floor plan would be useful.

I agree with Kelly, curtains would drive me nuts. I would suggest a daybed for her that she could make look like a sofa. Here are a few ideas for her: [houzz=]
[houzz=]
[houzz=]
[houzz=]