My 98-year-old grandmother is up just about every hour and I'm not getting any sleep. What can we do?

I would vote for MelatonEx (extended release melatonin) but YMMV. It may be one of your lowest side effect options, but you may end up needing something more potent adn her doc should help you with that. It sounds like she is tired due to lack of sleep too, and then after she's been up all night, you've got to be too tired to keep her from napping on and off all day though you are obviously making heroic efforts to do so. If no meds really work, you will have to get some shifts of aide care to make the situation sustainable at all in a home setting!

How about a glass of wine instead of all those drugs?

We had same problem with MIL. Combination of Ambient and anti anxiety mess. 1xanax at 6pm then at 8 pm her resperdahl, ambient and another Xanax. That was the only way she would sleep.

I've read that giving melatonin to a person with dementia could cause more problems.

How about going to your health food store and getting some Melatonin? It's our body's natural way of putting us to sleep when it's working correctly that is. I'd at least give it a try.