HI
my FIL also went from walking with a cane to a motorized chair and then to being bedridden in a care facility. As a family, we did all that we could to help my FIL who was VERY dependent but toward the end needed help with most everything. When the transformation in health first began, my son was also very young and then when "Nonno" passed :( my son was almost five.
That said, we were very honest about Nonno's ailments but never made it into a big deal. We treated Nonna the same as we always did and tried to convey in a gentle manner that death is also part of life... we didn't harp on the matter, but we also didn't beat around the bush... I just felt like my son was too smart for me to attempt to come up with anything less than the truth..
Even when my FIL was bedridden at the care facility, we took my son to see him everyday and allowed my son to hop up on the bed with his Nonno and snuggle and or talk. IF my son asked questioned about why Nonno could no longer do this or that, we tried in simple terms to explain things. I guess I figured honesty with the best policy...
My son who is now 9 does understand that sometimes in life , people do get sick... but it doesn't have to mean you don't have your dignity .. Also, Nonno did pass away :( and while I don't think everyone would agree or think it's the right thing to do, my son did go to the wake .. again, that isn't for all kids, but my son wanted to go and wasn't freaked out ..
In my opinion, taking the honest and direct route is what has worked best for us.. I never try to scare or shock my child with the truth, but I am as honest as I can be.. In the long run (and again, this is just my opinion) don't want to start a riot on here.. :) I think if children are taught that death should be feared , then it makes it harder down the road for them to comprehend loss... that isn't to say you don't teach them about dangers in life.. but when it comes to death... and or sickness.. it IS part of life... my biggest lesson to my son when it comes to death and sickness is that it can also bring you closer to LIFE... in other words.. cherish your family and friends... and above all, embrace the here and now.... nothing is guaranteed..
my best to you