I've been told that active sleep for toddlers and infants is normal. My daughter (age 4) is very jerky in bed. She sleeps with us alot as well, and I'm often kicked in my belly or side or slapped in the face because of her "messy" sleep habits. I call it messy for lack of better term, but I feel like she sleeps sort of all over the place. I've even found her completely sideways in our bed, or even upside down with her face by our feet. She talks in her sleep pretty frequently as well...sometimes, just talking, but I hear laughs and crys in the middle of the night and can have conversations with her in her sleep pretty often. In short...don't worry about her sleep. She is getting her REM sleep which is the important sleep.
I'd be more concerned about the teeth grinding. I used to grind too just a few years ago. My dentist told me to push my tonge to the roof of my mouth, towards the front teeth when I went to bed and eventually, it would become more normal for my tonge to keep that position while sleeping. It worked and I stopped grinding after a few weeks. Perhaps you could mention that to your granddaughter and she might be able to stop it on her own before it wrecks her teeth.