Some doctors told us yes, others told us it was common with urinary tract
infections (catheters can cause this)
and finally, correctly, the culprit was Keppra, the anti seizure medication they had him on. Once that was out of his system the hallucinations and false memories stopped.
As for short term memory, that has drastically improved over time, even though we still have some problems 9 months later. Everything just takes time.