I am sorry your dad is being so stupid. JWs fear the word apostate so much more than any other and behave totally irrationally. Even though we know they are being dumb and that they are controlled by the organisation it still hurts. The last words my sister said to me were angry ones and that hurts more than I can say. I haven't seen my mum since the decision was made to Df partly because I wasn't mentally ready for it. It is a hateful horrible practice that does not reflect christian principles at all.
There is no way to sugar coat the Grandad issue, if the children mention that he no longer visits you can agree with them that it is sad because we all love Grandad very much and he is welcome here any time. He believes that because we do not believe the same things he does that he should not visit. It is sad when people think like that. It is important that we respect one another and allow people to hold their own beliefs. For the moment we have to appreciate that Grandad sees things differently and hope that in time he will change his mind.
In my opinion if he is expressing the view that your children are going to die because of your views then it is better for him to keep his distance. He may not resist expressing these views to your children and that could be very damaging. It is certainly not something you want dumped on your children until they can appreciate that it is his distorted view and will not happen.