We evaluated the seal-like robot PARO in the context of multi-sensory behavioral therapy in a local nursing home. Participants were 10 elderly nursing home residents with varying levels of dementia. We report three principle findings from our observations of interactions between the residents, PARO, and a therapist during seven weekly therapy sessions. Firstly, we show PARO provides indirect benefits for users by increasing their activity in particular modalities of social interaction, including visual, verbal, and physical interaction, which vary between primary and non-primary interactors. Secondly, PARO's positive effects on older adults' activity levels show steady growth over the duration of our study, suggesting they are not due to short-term 'novelty effects.' Finally, we show a variety of ways in which individual participants interacted with PARO and relate this to the 'interpretive flexibility' of its design.