I'm sorry you're going through this. It's a very tough road to go down.
I would encourage you to register and post over at the Alzheimer's forums at
https://alzconnected.org. Although it has Alzheimer's in the name, it is really a forum for people with all of the various diseases that cause the collection of symptoms we call dementia.
Everything you wrote sounds pretty typical of someone with mid-stage dementia. A resource of symptoms by stages can be found at
https://www.dementiacarecentral.com/aboutdementia/facts/stages. I personally like the Global Deterioration Scale there as it feels pretty objective to me. These scales give a rough idea - for example, my Dad shows most of the signs of stage 5, and about half of the ones from stage 6. Every person is different, and not everyone shows every sign.
It's much harder when you have a sibling who isn't as helpful as you want them to be. It sounds like your spouse is on board with helping, and there may be community resources around you (church, other family, support groups, etc.) that you can lean on.
The emotional responses of your Mom may very well represent being afraid by her confusing new illness. Being patient, understanding, talking simply, talking slowly, talking calmly, and not arguing facts with them will help. There are other techniques you'll learn. You might also get and read "The 36 hour day" book where a lot of the techniques are discussed and a lot of good information is provided (
https://www.amazon.com/36-Hour-Day-sixth-Alzheimer-Dementias/dp/1421422239).
If she doesn't already have it in place, it would be good to get her will, health care directives, DGPOA, etc. in place while she is still mentally capable of executing those agreements. As long as your Dad is around, he can compensate for some of this, but - and I hate to say it but it's true - your Dad may also decline physically or cognitively or both as a result of his age and the stress and effort of taking care of your Mom.
The loss of taste/smell is probably COVID, not dementia. But dementia patients in later stages do simply forget to eat and/or forget how to eat.
If your Dad is amenable, moving them closer to you will be helpful. You'll likely face a bunch of times when you'll want to stop by, or check on something, or deliver something, or take them to the doctor, or whatever. My Dad is about 12 minutes away and that's been a great help because it lowers the barrier of stepping in to help with whatever.
Describing the new home as a vacation home to your Mom is a good idea, and is sort of an example of a "fiblet", which are used regularly with dementia patients. Once you get used to the idea and only use it for the patient's benefit, it's a very useful technique.
Oh, and it's also common for the spouse and extended family to downplay how far things have progressed. A doctor visit (either an internist or a geriatrician) can give you the objectivity and the diagnosis, which, while crushing, is actually helpful also because you'll know a bit more about what the situation is. Generally speaking, dementia is progressive and not cureable, but there are some medicines that may slow the progression. And if you know the specific type of dementia, that can help with knowing a rough prognosis. Finally, in some cases it might not be dementia and could be something treatable, like a long term UTI or depression, and treating those things that are treatable is always recommended even if there is dementia present.
Along those lines, I would point out to you that your parents might not live independently in the condo for very long. You can have care providers come into the home, but it may get expensive, especially for standby medical care. I'd encourage you to at least start taking a look at some of the assisted living places nearby as well, and moving them straight from their home into assisted living might be a good approach as well.