Mom is fine except for making up stories or adds on to stories. Is this the start of dementia?

Maybe. Maybe not. But since she lives with you, you are in an excellent position to keep an eye out for additional symptoms. Track these incidents in a notebook. They are worth discussing with her doctor, especially if there are additional symptoms, but I don't think it's an emergency.

Oh, goodness. Old folks have been embellishing stories for ages. Unless you notice other problematical changes -- loss of reasoning ability, confusion, disorientation -- don't worry. You'll know pretty quickly if there is a problem if you spend a lot of time with her.

She is not "fine" if you are seeing confabulations, making up and adding on. See the MD and find out if this is from medications or something else.

There are lots of different kinds of dementia. Some have unique features, like hallucinations. My mom's cognitive (thinking) problems started out not as memory loss, but as inability to reason, to solve problems and to come to a logical conclusion about events. I was fortunate that early on, the geriatric psychiatrist who was treating her anxiety, recommended that she see a geriatric neurologist and neuropsychologist, who gave us a baseline of mom's ability to care for herself and do various tasks (no driving, no bill paying, no setting up her own meds)