Be aware that though grandparents might really really like their adult kids and not want separation...the adult kids may very well have the opposite feeling about togetherness! My mother and father would gladly share rooms with me and all my siblings. But experience (hard, hard experience) has led us to book my parents a separate room when at all possible during any vacation and especially at WDW.
I travel with extended family during all my WDW trips. Out of six recent trips, two have been with myself, kids and one sister and her family. The rest have been with my parents and other siblings and their kids.
Over those six trips we have stayed in separate WDW resorts, in the same WDW resort, shared rooms, and had our own. What we've learned works best for us is individual space. It doesn't matter if we're at the same resort or different ones, we just like our own rooms and we like being on WDW property. My parents do best without sharing, even if they think they like to share (they have a very set, inflexible schedule that is just really hard for kids to adjust to...and adults who are on vacation and don't want to be in bed at 8 pm). I like my own space when I travel with my kids, and my siblings feel likewise. When I travel without my kids (four out of six trips), I'm fine sharing with two other adults, but four in a room gets really old really fast.
Staying offsite in one place, for us, would be horrible because being under one roof (no matter how large the living space) is too much togetherness. We've rented vacation houses as a large group outside of WDW several times, and more space (i.e., separate rental houses) makes for much happier adults and kids. The few times we've all shared one house led to transportation aches (when you're in one unit together, there's this automatic need to 'save space' by carpooling...so someone who wants to go back to the cabin after lunch for a nap has to wait around while their driver shops for souvenirs and gets grumpy and unhappy). And different styles of living lead to conflict in shared living spaces (my mother insists that the kitchen closes at 8 pm...several teenage male grandchildren and some adult kids disagree).
Staying onsite at WDW with our own rooms gives us space. We don't have to share an eating area, because outside of set ADRs with the family, we're on our own and can snack in our room or go get QS etc. AND, because of WDW's transportation to resorts, we can leave whatever we're doing to head back to our room when we want without that decision impacting others in our group. We spend lots of time together and really enjoy it! But we enjoy it most when we are not together 24/7.
That’s my family. Others are different. But I would always opt for separate rooms onsite at whichever resort is within budget.