The lady's using some kind of hearing aid, either an ear trumpet, or the carbon microphone deally pictured above, which had supposedly been invented a few years prior to the footage. It's not clear what she's so keen on listening too, though something like "Hey Fat Lady! Yes you. The water buffalo. Get out of our shot," seems a likely possibility. ________________________________________________
The lady is scratching her ear or earlobe or face because of some irritation. Was she a heavy drinker suffering from the DTs caused by Prohibition? Or did she have a case of the Frenchman's Complaint? ________________________________________________ She's Shielding Her Eyes
The shadows in the video reveal that there is a very bright light shining on the scene from a low angle, which -- considering the technology available at the time -- was either the sun, or the face of an angry, Old Testament God. So, she could simply be keeping the sun out of her eyes, or trying to avoid being turned into a pillar of salt. ________________________________________________
The video itself could have been doctored in the modern era, either as an easter egg inserted by the studio which released the DVD, or by whomever uploaded the clip to YouTube. Modern technology makes manipulating video images to insert people not that difficult, so expect to see this lady showing up in the background of a thousand damned things across the Internet by this time tomorrow.