First off, that's NOT an allergic reaction. It probably is a histamine release, which opiates can do, which causes formication (ie, "bugs on the skin" feeling). Honestly, a little benadryl might have fixed it.

Does of the drug was probably too high. Whether he was competent to sign or not is actually a legal question. As long as he's oriented to name/date/circumstance, he's usually considered capable of making decisions.

However, the nurse SHOULD have spoken to someone higher than her before signing. Not technically illegal, but the legitimacy of his understanding is questionable.

Long story short most nursing/rehab facilities suck (probably 80-90% of them in my experiences). I'm not sure where they get their nurses, but I've routinely seen folks lying in soiled diapers to the point of bedsores, people with difficulty breathing getting oxygen by a mask at 2 liters/min (min for a mask should be 8 - essentially the nurse is suffocating them), everyone going on lunch break together and leaving EVERYTHING unattended. I'd sooner euthanize my parents than put them in one.

Very best thing you can do is have someone there as much as possible. The more you're in the way, the more the nurses have to do their jobs, or questions tend to get asked of the supervisor/charge nurse, ie "how come his pain meds are late? Where's his dinner? He pushed the call bell for 30 minutes." Stuff like that gets written up, and that leads to job insecurity.