The ending of the movie "The Three Burials of Melquiades Estrada"?

Can anyone shed some light on the ending of this movie starring Tommy Lee Jones? Why does his Mexican friend lie to him about having a family? And why would he make up the name of the small village that he lived in? Was it just something he fantasied about because he was lonely in America? Also, does Pete (Tommy... show more Can anyone shed some light on the ending of this movie starring Tommy Lee Jones?
Why does his Mexican friend lie to him about having a family? And why would he make up the name of the small village that he lived in? Was it just something he fantasied about because he was lonely in America?
Also, does Pete (Tommy Lee Jones) just settle for a peaceful looking place as a site to bury him in the end, or does he believe this is really the place his friend told him about?
Update: Thanks, so, the wife probably told her new husband that her first husband (the father of her children) had died... and the old man genuinely didn't know that the small village existed...
Makes more sense...
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