I'm at that stage in life where I've seen a lot of friends go through similar things. It does depend on how much your MIL will want to live independently, how much she can cope with on her own and her and your finances. Options:
One just recently finished a big renovation of her house where she converted a dining room and then added an addition to the house to create a small in-law suite for her mother. Her mother has a bedroom, a sitting/living room and a small kitchenette and bathroom. If she needs more than the mini kitchenette (I didn't see it, but it sounds like a small sink, mini-fridge, microwave and maybe a hotplate), then she can come into the main house and use the main kitchen.
If she's pretty capable of living independently but just needs some help, I've seen several friends who have hired daily help anywhere from 1-6 hours per day where a nurse or attendant comes in, helps do household chores, gets meals ready and sets them out so the person can make their dinner when ready, run errands or take the person on errands, etc. Each situation is tailored to the individual needing assistance, so it's hard to generalize too much.
If she's not so capable, then perhaps an assisted living facility is the right place. There are many different types, ranging from institutions where you have a room to yourself with share common space and dining facilities plus round-the-clock attendants to ones where you essentially have your own apartment or even home and there are nurse/attendents in the facility available both for drop-in or on-all support as needed.
If she insists on staying in her own home, does she have a downstairs room like a dining room or den that can be converted to a first-floor bedroom? If so, you can convert and perhaps hire someone to come in an help. How much help you will need for her will depend on how able she is to care for herself and how much you can afford.
If she is willing to relocate, what type of living arrangements is she open to?
These days, elder care is a huge industry and there are many, many options. You need to have a frank discussion with her about what she wants before you can whittle down the options to a manageable number to review and consider or you could be spending months and months just figuring out what you should consider.