The medical term for an auditory hallucination is a paracusia. Strictly speaking, Louise (the character played by Joan Crawford in 'Possessed') is experiencing something slightly different as she transforms 'real' sounds, such as the wind blowing, into someone beckoning her by name. A transformation perhaps similar to that practiced by the cinema listener, particularly with the use of foley sounds, where the sound of a fight might be created by slapping a chicken carcass.
The music which Louise remembers, reveries and distorts is from Carnaval by Robert Schumann which is a musical cryptogram and the particular piece played is meant to capture the spirit of Chopin. Schumann himself was plagued towards the end of his life by auditory hallucinations. He 'heard' music by the ghost of Schubert along with angelic choirs before such voices were replaced by the sound of demons.