Now that sounds like kat, and I can't imagine anybody who'd be more suited to do it. Especially with the dulcimer now, it's the right instrument.
The thing is with hospices, people die at all ages, so there can't be any rules about the age of the songs and so forth.
There's a little book I picked up in a sale somewhere made up of poems and pictures from people in a hospice, gathered by a writer in residence - "Now I can tell" edited Lynne Alexander. Out of print, which is how things go. Anyway, here's a quote from DH Lawrence that serves as its introduction (and I don't even like DH Lawrence generally):
We are dying, we are dying, so all we can do
now is to be willing to die, and to build the ship
of death to carry the soul on the longest journey.
A little ship, with oars and food
and little dishes and all accoutrements
fitting and ready for the departing soul.
(DH Lawrence, from "The Ship of Death")
I think the crucial thing is to share with the people the songs and the tunes that you love most yourself.