Originally Posted by Master Jaken

You don't, in theory, HELP the grandma... you have to listen to one of her stories without falling asleep (seriously). You need to buy the All-Night Mask to do that, which becomes available in the Curiosity Shop on the second night (but ONLY if you don't stop Sakon from stealing the old lady in North Clock Town's Bombs). It costs alot, you'll need a wallet upgrade to get the money to buy it. Once you have it, put it on and talk to the grandma. Listen to a story, and then she'll ask you if you liked it. I think you should say no, and if you do, you get a piece of heart. If you don't, listen again, and say yes. You will have cleared up the Grandma in your bomber's notebook.

Oh, and the Curiosity Shop? To get a happy sticker on that, you need to do the Kafei and Anju quest, which is VERY complicated. I can't explain all of that. You'll need to consult a walkthough.