You simulate hallucination by creating different experiences
You don't have to use secret notes, at least not for long. If you give two players, two different descriptions of what they hear, see or smell, you will create conflicting experiences. They won't know which is true and which is fake, or if both are true, or both are fake. It will create mistrust in the situation and on each other's characters.
Secret notes are fine as long as these hallucinations aren't common (yet). But soon they will start sharing the information on those notes and you might as well stop using them. When they recall information or ask you to repeat an information you gave them, cause even more confusion by saying it was something different than what you actually described, and they will hate you for this, but they are paranoid, that's the point.
Be descriptive. Even if that description is not accurate. Never give any meta information, such as game terms or exact information about what something is. For instance, don't say they sense the smell of rotten food, but look up how rotten food actually feels like and describe it indirectly ("A stale, ochre and fedit odor hits your nose, chilling your skin and revulsing your eyes. The sensation comes from every part of your body.").
In their brain, instead of thinking about their own personal experiences of what rotten food smells like, they will be focused on that sensation, trying to associate it with several different things, but not quite certain of what it is, which will leave them nervous.
You simulate paranoia by removing trust
Paranoia is slightly more complicated, but can be done using NPC's at first, make NPCs sound fishy or having second intentions, describe intense eyes or body languages that seem sketchy, like looking around before speaking, hiding something quickly when you go talk to them, whisper something in one PC's ear so the others won't listen, etc.
When they suddenly disappear once the PCs start discussing something is also a great moment for them to think "shit, we took our eyes off him for a second and he vanished to plot something, he is suspicious". Eventually, make the NPC befriend someone, and trust some information only to that PC, it will make that PC distrust the NPC and every other PC also distrust that PC. From there on, it's a spiral to a TPK, really. Either they will get their shit together, or kill each other.