Sorry to hear about your father. Mine was hospitalised many times with pneumonia and other issues over several years before he died, and hospital-induced delirium was increasingly an issue with him. It is very common - if you look down the elderly parents board there is a recent thread on this topic.
There were times when he had pneumonia when he was talking total gibberish (babbling away, seemed to think he was communicating but was not using real words), and other times when he sounded normal but was clearly delusional. Mostly it only cleared up when he left hospital, but obviously he had to be medically fit for discharge before that could happen. By the end I think he was also suffering from the early stages of vascular dementia, and anything else going wrong with him just magnified the effects of that.
You may find that when your father is physically well enough to be discharged his mental state will improve again, but it is probably more important to concentrate on his physical recovery for now.
Do you have health and welfare power of attorney for him, and have you ever talked about his wishes? What is his general state of health and quality of life before he went into hospital?
In my father's case, I ended up wishing that he had been allowed to succumb to one of his many health issues months before his eventual death, as his last six months or so were awful for him and for the rest of the family, but he had multiple health problems, had been disabled for nearly 20 years, and his quality of life was rapidly declining before that. Your father may be in a much better general state and so could still enjoy life for a while longer if properly treated.