My take is that Diana in the present (not in flashbacks) was a physical manifestation of the mother's mind. Diana was a real person who was sent to a psychiatric hospital because of violent reactions to light. The doctors tried therapy exposing her to high levels of light, but it killed her. There is a real syndrome called xeroderma pigmentosum which causes physical intolerance to light, and the implication I got was that she had this. During her treatment, she befriended the mother, who was in for depression. After the real, human Diana died, the mother kept her alive in her mind. The manifestation was stronger when the mother is depressed, which is why Diana tried to prevent her from taking her meds.
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