It seems to me that the narrator is somewhat delusional. She talks of her "condition" and how nobody believes she is sick except for a temporary nervous depression. It appears that she has had a breakdown of some sort and maybe she is really in an institution, not a summer home. She speaks of taking phosphates or phosphites and is forbidden to work. "I have a schedule prescription for each hour in the day, he takes all care from me, and so I feel basely ungrateful not to value it more." (Gilman) If she is on medication and locked up in a room, is it no wonder she becomes part of that room. She becomes so absorbed with the yellow wallpaper, that she actually believes she becomes the woman within it and actually goes insane.
I agree that she is not anywhere but in an insane asylum and her fantasy of "her husband" is from her illness. I think the doctor just plays along to keep her as calm as possible.