But what I think I'm trying to get at is that utterances such as "I'm a free person...I'm a good person...What I'm doing is important...etc." can be truth statements within the context of their respective systems. 'I am free, a good person, important' etc are meaningless outside of this context, of course.
I'm thinking the disconnect here is with being.
As an example, let me reference a king. What is a king? A son of king? That's one way. Appointed by a constitution? That's another. But is there an inherent 'kingship' outside of such definitions? Heredity is a property of the idea, not of kingship. So we can have a king but never a king which is a king. But regardless he can order my head cut off. In terms of a king as we define a king is the son of a king, then it is a truth claim to state that Arthur is a king. A social construct, a fantasy, is not precluded from instantiating something with 'power' in the world.
In a way, I think experience by definition is to 'play make believe'. Our experience by definition is always going to be at least one step removed. We do not perceive the world; we perceive constructs derived from sensory data.
Why I state insanity/sanity is meaningless in terms of being is that I don't see such as being applicable. As an example of what some might call insanity let us take: believing something is present which in fact is not there. Such is defined as irrational. It is contrary to the senses, as there is no sensory input to indicate such. However, if a hominid cognizes a lion in a bush, aka paranoia, and runs, there are generally two possibilities: 1) fruitless expenditure of energy decreases the individual chance of survival or 2) believing a predator near which cannot be perceived provides instances of escape where reliance on purely sensory data would have proved inadequate. Here what can be termed insanity has a chance of informing mental models of reality in ways that sensory data is too limited to do so. In this way, it can often enough better represent 'reality' in terms of survival.
Even our man with the coconut could derive a survival advantage from these activities, in the sense that social creatures generally require socialization or risk cognitive decline, therefore impairing their chances of survival.
(Survival is, of course, a short-term proposition which we extend implicitly into eternity, in one fashion or another, but evolution is a moment-to-moment phenomena.)
Anyway, I'm by no means trying to argue with you. I'm more musing than anything.