As far as decorating goes she controls things like paint color, window coverings, anything attached to her property. She can not tell you what color coach to buy and things of that nature.
Very few of your details are actually relevant. The short of it is that she can request that you change rooms. She cannot force you to. If you decline to change rooms, she can give you notice to vacate. If you refuse to vacate after getting notice, your rights become hazy.
In CA, and I know you are in FL, as a single lodger, she can change the locks at the end of the notice to vacate dates and if you show up, she can have you removed as a trespasser. I couldn't find any specifics to lodgers vs. tenants for FL, so I would assume that you have the same rights, and restrictions, as a standard tenant. That means notice, a court date, and then a sheriff escorts you out if you haven't done so on your own.
As a lodger, you typically have minimal rights to decorate. You can add moveable things, like flower vases, to your room. You may not have the right to tack *anything* to the walls, and you do not have the right to change anything fixed (carpet, tile, paint, window coverings). If you can find vinyl cling decorations to put on the wall, you can probably do that, as long as they don't risk damaging the wall in any way.
She can ask you to leave with 30 days notice. You want to stay you need to take the other room.
Regardless of whether she owns the place or not she is your landlord. You are on a month to month agreement which means all she has to do is give you proper 30 notice to change the terms. So you have 30 days to change rooms, convince her to change her mind, or move out.
If she doesn't have the right to rent the place then you would be talking about blackmail to force yourself to get to stay there. That would not be a good idea especially given everything else you said about the situation.
If I were you I would try to find another place to rent. I know that rent is high everywhere, but since there is no rental agreement and the rent is the same for both rooms, and it is her house, she can do whatever she wants it's her house and this is her daughter and right now, blood is thicker then water. Did you think she wasn't going to give preference to her. Since there is no lease, I would move back into the smaller room and start looking for another place. She cant hold anything against you. And then again you don't know the dynamics of what the daughter is going through and how this might impact you in the long run. I would find somewhere to live immediately. Just give her 30 days notice so she wont try to take you to court, and since there is no lease, she has no case, but do the 30 days.
Having to change rooms is a good question and I've never heard of such a situation. I really don't know for sure on this part of your question. I would think that because you are a paying teneante and odds are her daughter won't be that she would prefer to keep you happy and the income coming in from your rent. I mean its a shame that her daughter is having a hard time, but when ever something goes wrong are you expected to play musical rooms, that isn't right and I would tell her that. If she still insists on you moving I would request that she give you a written 30 day notice to move rooms and have a rent deduction and get that in writing too, perhaps.
In regards to decorating the place I would say if you were renting the place in it's entirety no she could not tell you how to decorate, but as you stated you are renting a room. You can decorate the room however you want.
My landlord rents both rooms in the apartment I've been living in for about a year now separately. Despite one being a master bedroom she charges the same rent for both rooms. When my first roommate (I've had two since moving in) moved out, she let me switch rooms. However, her daughter is apparently in some kind of trouble up in new york and is moving back down here. Much to my frustration, my landlord has stated that she needs me to move back into the smaller room because her daughter is coming back down here. My stuff barely fits in the other room and the desk in it is kind of crappy (its one I bought, most of the apartment was pre-furnished), so I REALLY don't want to move rooms. I have not really had a chance to discuss this with her yet, since she only called me a few days ago to notify me of the situation.
I live in Florida and there is no lease, just a rental agreement with no specific terms other than the rent amount (it doesn't specify which room I'm renting or have an end date or anything).
I was also wondering if it is illegal in FL for her to tell me how to decorate the apartment. I've heard that a landlord can't tell you that, but I'm not sure if that is a law that applies in FL or just something most other states have that we don't (for example, most states require 24hrs notice before a landlord enters the apartment, but FL only requires 12).
Finally, is she legally allowed to evict me if she gets mad about my complaining or refusal to switch rooms?