There’s nothing wrong with me.”

The first sentence describes Granny’s physical movements in relation to another character, Doctor Harry. The narrative smoothly transitions into her inner dialogue; the second and third sentences reveal her frustration and possible delusion that the grown physician is a bratty kid playing dress-up. This paragraph finishes with Granny barking at Doctor Harry as if he were a schoolboy.

Her internal sensations meld with her hallucinations of the outside world. Porter later describes,

Her bones felt loose, and floated around in her skin, and Doctor Harry floated like a balloon around the foot of the bed. He floated and pulled down his waistcoat, and swung his glasses on a cord.

Obviously, neither her bones nor the doctor literally float around, but the story’s stream-of-consciousness style conveys this sensation. External actions affect and divert Granny’s line of thought. For example, after she hears her daughter Cornelia whispering with Doctor Harry, Granny peevishly thinks,

Cornelia was dutiful; that was the trouble with her. Dutiful and good: “So good and dutiful,” said Granny, “that I’d like to spank her.” She saw herself spanking Cornelia and making a fine job of it.

And it is as if she spoke these thoughts out loud, as Cornelia immediately asks, “What’d you say, mother?” Granny will not admit what she is thinking, but simply continues her inner monologue as she drifts off to sleep:

It had been a long day. Not that she was tired. It was always pleasant to snatch a minute now and then. There was always so much to be done, let me see: tomorrow.

Then Porter reveals all the worries racing through Granny’s mind. The old woman runs through a to-do list of tasks that she needs to complete “tomorrow.” In this internal monologue, the reader learns that Granny has saved and hidden love letters from both her first beau as well as her late husband John, and that she wants to hide them before her children find them.

This narrative mode of stream of consciousness continues to mix the physical and metaphysical. She cannot physically rummage through the attic to locate the letters, but her recollection of them stirs up memories of George and John. Also,

While she was rummaging around she found death in her mind and it felt clammy and unfamiliar. She had spent so much time preparing for death there was no need for bringing it up again. Let it take care of itself for now.

Memories from her youth lead to musings of death, which themselves lead to memories about her father who lived to be one hundred and two years old and that she may live longer just to bother Cornelia a bit more. Her annoyed exchange with Cornelia then reminds her of how she successfully raised her kids on her own, ran a household indoors and out, birthed babies as a midwife, and that her late husband would not even recognize her as the woman he married.

In her mind, Granny talks to her children as if they were still very young, advising them about life before trying to take a break with

Now, don’t let me get to thinking, not when I’m tired and taking a little nap before supper.

This stream-of-consciousness style mixes Granny’s thoughts and physical sensations; it also takes the character out of the present and transports her into the past. The present physical sensation of a pillow against her shoulders

pressed against her heart and the memory was being squeezed out of it … Such a fresh breeze blowing and such a green day with no threats in it. But he had not come, just the same. What does a woman do when she has put on the white veil and set out the white cake for a man and he doesn’t come? She tried to remember.

The pillow becomes a catalyst for her bitter recollection of being jilted on her first wedding day. Although she tried to forget George after sixty years, that day burns in her memory. She still wishes to show George that she was able to marry someone else, have children, and build a life after all.

This stream-of-consciousness style further distorts time as Granny thinks that only five minutes—not an entire day—have passed since the doctor’s visit. The parade of visitors—a night nurse, Doctor Harry again, a priest, her second daughter Lydia, and son Jimmy—stir up more memories as Granny recalls her daughter Hapsy who died during childbirth, the priest’s witnessing of her first failed wedding, and more.

Through stream-of-consciousness narration, Porter demonstrates what Granny is pondering as death approaches:

She was so amazed her thoughts ran round and round. So, my dear Lord, this is my death and I wasn’t even thinking about it. My children have come to see me die. But I can’t, it’s not time.

The dying woman runs through her list of unfinished business she still wants to accomplish—leave jewelry to Cornelia, pass the land onto Lydia (not Jimmy), finish sewing, send wine to a nun, etc. Stream of consciousness allows the reader to accompany Granny on her journey into death.

Stream of consciousness is a style of writing that depicts a character's thoughts and feelings as a kind of flow, unseparated from one another or from that character's reactions to the things going on around her. In the case of this story, then, the periods in the text where Granny Ellen Weatherall's inner monologue is described by the narrator are presented as stream of consciousness.

After the doctor comes and goes and Cornelia leaves Ellen alone, her thoughts begin to drift: she thinks of how she prefers things to be orderly, whether physical or metaphysical, recalls the items in her kitchen and the dusting that needs to be done, and her mind alights on the youthful letters she sent and received from her husband as well as her first fiancé. She makes plans for tomorrow and considers death again. Ellen does have a short interaction with her daughter, Cornelia, but she lapses into stream of consciousness again soon.

In her mind, she responds with indignation to her daughter's behavior, and she begins to think about all her children as adults, and then as they were when they were children, and Ellen considers wanting to speak to her husband. She seems to desire his approval and his recognition that she did well with their children, their farm, all on her own. This period of stream of consciousness lasts significantly longer than the first, giving an indication that Ellen is growing nearer to death. We see the way her mind moves from one subject to another, apparently relatively unmoored and directionless, making odd connections that are only somewhat related, if that, to the world outside her head.

You have asked lots of questions, so I have edited it down to one question focussing on the general narrative method adopted and how it affects the story. The stream of consciousness narrative method has been selected because with it, the author is able to capture the thoughts of the main character who is dying and therefore confused in her thinking. It is based on free association, which means that the character begins to think of one thing, and that thought triggers off another memory, which in turn can trigger off other memories which may or may not be totally unrelated. For example, consider this free association from the story:

A fog rose over the valley, she saw it marching across the creek swallowing the trees and moving up the hill like an army of ghosts. Soon it would be at the near edge of the orchard, and then it was time to go in and light the lamps. Come in, children, don't stay out in the night air.

Here we can see how recalling fog at twilight reminds her of calling in the children and lighting the lamps. Thus the narrative method adopted allows us to experience the scattered and incoherent thoughts of a woman on the edge of death as she tries to make sense of what is happening to her and is moved from one memory to another just as a butterfly moves from flower to flower.

Stream-of-consciousness is appropriate to Granny's thoughts as she lies dying because her mind moves in and out from memory to a blurred conception of the present.

Devised by the Modernists as part of their effort to capture the essence of the fragmented modern world, the technique of stream-of-consciousness exhibits a lack of external order in human existence that is often splintered and disjointed. The Modernists felt that people should turn their thoughts inward. Certainly, Granny Weatherall's thoughts are introspective and they drift from one subject to another as she awaits the priest who will give her the Last Rites. Even though her thoughts wander from memory to the presence of her children, time and time again they return to her memory of the wedding day of her youth and the humiliation of being left at the altar by the bridegroom. Indeed, this memory yet rankles.

For sixty years she had prayed against remembering him and against losing her soul in the deep pit of hell, and now the two things were mingled in one and the thought of him was a smoky cloud from hell that moved and crept in her head.... Wounded vanity.

Before she dies, Granny Weatherall continues to think of George because she wishes someone could find him so that she could tell him that she "had [her] husband just the same and my children and my house like any other woman." She also longs for Hapsy, her youngest child, who does not come to her mother's deathbed. "Oh, no, there's nothing more cruel than this--I'll never forgive it," Granny thinks. "For the second time there was no sign!" Granny feels jilted again by Hapsy, and she perceives herself blowing out the candle of life.

Granny Weatherall is dying. She is not thinking clearly so by using the stream of consciousness, the author gives a spontaneous feeling to her thoughts, and to the confusion Granny experiences. Because she is confused and also ill, her thoughts are jumbled. Yet the way they are presented makes it easy for the reader to establish what was important to her. Events occur in the story, not in chronological order, but in the order Granny remembers them. This seems like it would be confusing, but the lack of clarity gives the story an authentic feeling and we end up admiring Granny's life and the obstacles she overcame.