"The Old Hag" is typically the feeling of something heavy sitting on your chest (people have opened their eyes and reported an old woman sitting on them, which is where the name comes from).

To help the feelings subside, you could try thinking of something else. Imagine the sensations of someone massaging you, instead. Something more pleasant but still a tactile sense to keep the paralysis strong. It can be hard in the heat of the moment, but it's worth a try. To convert it into a lucid dream, you just have to ride it out while visualizing a dream scape. Eventually the feelings may stop or change, sounds may become more audible though everything is still dark. At this point, you should be able to open your eyes and be in a dream. It's a little different for everyone and you may have to experiment. Seeing as you have SP so often, you'll have plenty of time to practice.