Did he, really?

I always doubted Ishamael created these illusions (though I fully agree with your reasoning that they were an illusion, and why).

But I'm quite certain Rand himself, not Ishamael, made them.

Ishamael rambled and rambled, frightening Rand with hidden servants of the DO behind and ahead and at his side, and that he would have Rand serve him alive or from beyond the grave.

As we learn much later, in tel'aran'rhiod you must always control your thoughts and emotions (unavowed or inconscious fears and desires seem the most treacherous of all) or they can become real.

Rand was afraid for Nynaeve and Egwene he had tried to convince not to come in the Blight (and now Ba'alzamon was saying he had hidden foes in his party, and the girls were alone with whoever that was), and Ba'alzamon had planted the notion in his mind moments ago that the dead could still serve him. Which only significant person close to Rand has died? Only his mother. In a previous encounter, Ba'alzamon had even planted the notion that she had been no more than a brooding mare in a giant WT/BA plan.

Now it was "you'll serve me even in death" and "I have hidden servants near you, all around you. I could have killed you in your village but I wanted you to follow the path you've followed, which lead to this moment." Etc.

What happens next? Kari al'Thor shows up in a dress Rand recognizes as a good EF dress (ie: nothing un-EF like with the dress to Rand's eyes). Egwene and Nynaeve have in their hair the flowers the Nym put there at the Eye of the World.

How would Ishamael know about Nynaeve and Egwene with flowers in their hair? Rand surprised him in TAR, he wasn't at the Eye. When did Ishamael become knowledgeable in Two Rivers female clothes to create Kari's dress with the right cut and fabric? More telling still: we know Rand barely remembers Kari's face - not much more than her beautiful smile and her kindness - and eyes that are his own, - and yet he recognizes the (kind and smiling) Kari illusion instantly. Why? Because that wasn't an illusion of Kari, that was a TAR illusion of Rand's mental image of Kari. To anyone else who knew her, that illusion was probably vaguely like Kari at best. Not to Rand, because he made her just like his own dim mental image of her.

Rand made these women out of his own fears. He wanted to deny "the DO" and believe all "he" said, but some small part of him feared it was all true. That small part and his emotions for Nynaeve, Egwene and his dead mother made the illusion. Ba'alzamon saw the illusion forming and called Rand's attention on it (which made it stronger, they would probably have faded quickly without Rand being aware, otherwise).

Rand then denied their reality (which is how to make such illusions vanish), and Egwene and Nynaeve indeed began to fade (the most conclusive sign that the illusion was Rand's, not Ishamael's whose will would have held his creation), but not Kari. Why? Because Rand has stupidly said aloud that the woman was his mother and that she was dead and safely in the light, which was way too good an opportunity for Ishamael not to use it. It was a simple trick for a dreamwalker to hold the Kari illusion and make her tell Rand the little "the DO can reach anyone in death" propaganda bit that was coveniently confirming what Ishamael had said to Rand earlier, then create the torture scene. Ba'alzamon lost his concentration because of Rand's channelling: he rather expected Rand to beg for his fake-mother's salvation. One last sign that Kari was Rand's illusion? In the end (after Ba'alzamon lost his grip on the illusion or released it in shock at Rand's channelling), she said precisely what would have been Rand's deepest and most fervent wish : with his nifty sword of light, he had saved her from eternal servitude to Shai'tan. That "success" strenghtened Rand, who attacked Ba'alzamon and cut the black cords. "Thanks Rand, you saved me" is most definitely not something Ba'alzamon would have had the illusion say, he was trying to convince Rand there was no escape of any kind from Shai'tan... So, by the end Rand was inconsciously back in control of his Kari illusion again. He wouldn't let her go without a confirmation he had saved her.