MIL possibly moving to independent or ALF. Does anyone have any advise in comforting her?

There are small businesses that help with just this. They will help your loved one decide what moves with them, draw up a floor plan of the new place and then try to create a home that is as close to the one they are leaving as possible. It is a terrific service and lets them work with a professional which might be easier and less overwhelming.

These are wonderful ideas; thank you so much. She is "house-hunting" this week and hopefully will settle on a new place. We are actively involving her in the process.

I like the ideas of the pictures also, but take breaks if its overwhelming to her.

When we did it with my MIL certain items were given to family members but we all
lived out of state so mementos were limited. She had good friends in her city and she gave items like freezers extra beds and dressers to their grandkids who were just starting out.
She was moving out of state and her apt was alot smaller so she had a limit of what would fit, but believe me she still brought alot and most of it is now stored in pur garage.
My mil didn't want to be involved much in her move I think she was in shock or overwhelmed so we had to bring it to her if we thought it was a maybe and then listen to the stories of where she bought it and what year it was bought.
To this day she still complains that she wishes she had some of her items even though she would never use them. Some of her things were donated to charities and some tossed. We also hired a cleaning company/ movers to deal with items that we could not take to a donation center or that they could pick up and they could do with as they pleased with the items.
I wish you luck, I know I never want to do that task again in my life.
Also my kids have been instructed take what you want and donate the rest. Just make sure they have bingo where I move to. :)

Maybe taking some photos of her items into a collage frame and hanging it on the wall? She is not going to point to something and say, "toss that!" But take her to each room, give her a small box, and ask her to put her stuff in it.

When the box is full, she will look at it and maybe switch something out. Take those boxes with her. Then later when she is not there, box the rest up, labeling it.

Get a small storage space (either rent it or in someone's home. Put her stuff there. And wait. She will let you know what she misses or wishes she had.

For stuffed animals that smell, if it is mold, it is bad. If it just has an odor, put them in a dryer on fluff with febreeze, then take them out, put them in a box with dessicator bags, and some lavender or something she likes the smell of, tied in cheesecloth. Close the box. Open it two weeks later, and air them out. If they still smell bad, the odiferous component is permanent. Otherwise, they were just in stale air.

My MIL was very stoic and did break down once. It is tough. Do not get rid of stuff, too soon, or you will come to regret it.

Ideally you take her to lunch while the movers set up her things in the new room. We did that for mom and she was immediately comfortable. We did not clean out her house while she was still there, nothing was touched to avoid upsetting her.

I'd do it the other way about. Go round the house earmarking significant items she will be taking with her, and talk enthusiastically about how beautifully her new place will be arranged. Meanwhile, carry on winnowing but try to keep it low key. For example, you could "tidy up" a cupboard so that at the end of an hour she has a lovely tidy cupboard with her belongings still nicely arranged - only minus a few that turned out not to fit back in the cupboard, to be broken, or to be simply surplus to requirements (like the seventeenth tablecloth with a wine stain on it), which you set discreetly aside and don't talk about. Do keep these sessions short and *always* quit while you're ahead; a little and often, if you can manage it. How much time do you have in hand? Has she chosen somewhere she'd like to move to?

We did suggest we scan all her photos and then she can look at them on her PC, which she uses and loves! But, yes there is a story to tell with each item and a photo of it might be good.

What about giving special items to family members, like grandkids, nieces and nephews? Also, what about taking photos of special items?

To me downsizing to move into independent living would be like moving into a college dorm but much larger if your Mom is going to have her own small apartment... if your Mom can relate to that, she might think differently about being scared to move.

Oh gosh, trying to get one's parent to downsize isn't easy. For the past two years my Dad has been going through file drawer after file drawer of stuff... and like your Mom, he has a story to tell on each sliver of paper. Just recently he finally pitched his physics papers from college in the 1940's, or those papers could still be sitting in the "maybe" box.... [sigh]. And my Mom downsizes by donating one knick-knack per year.