Grund is used, for example, for the bottom of the sea (auf dem Meeresgrund) or for water generally (ich habe keinen Grund = I can't touch the bottom with my feet; I'm out of my depth in this water). Or perhaps for the bottom of a mine.
So, not really "ground level" but more "at the bottom".
Wow, this answer is so helpful! It points to the assumption inherent in Google's translation of "on the bottom shelf" as "auf dem unteren Regal" that there are only two shelves and to my naive trust of Google and lack of German-language acuity in not immediately recognizing "unteren" as the comparative "lower," as opposed to the superlative "untersten" (lowest).
English grammar disallows using the superlative (lowest), when there are only two items. Presumably, German grammar also requires at least three items to use the superlative (unterst...).
However, in English one can say "the bottom shelf" for any number of shelves more than one. The question is: Does German have a single word that works for any number more than one?
The Oxford German Dictionary entry for the adjective "bottom" offers only "(lowest) unterst...; (lower) unter..."—which suggests that there is no single German word that works the way the English adjective "bottom" does.
Apparently, German expects the speaker to know whether there are 2 or more than 2. If not, the grammar seems to require "auf dem unteren oder untersten Regal."
There are a lot of differences like this between English and German. For example, English has "sibling" and "siblings," but German has only "die Geschwister" (pluarl). If there is only one sibling, German expects the speaker to use "Bruder" or "Schwester." If the speaker doesn't know or wants to avoid telling, then it's "Bruder oder Schwester." Ambiguity or uncertainty is sometimes easier to achieve in English. :-) Stereotypically, Germans are more precise.
This is because both 'on' in English and 'auf' in German each have multiple meanings, but while there's a lot of overlap, they don't overlap completely.
In other words, in many but not all cases, 'auf' does mean 'on'; and in many but not all cases, 'on' means 'auf'. This happens to be one of the cases in which 'on' and 'auf' do not have the same meaning.
Learning prepositions can be frustrating and confusing. I found it better to think of prepositional phrases, rather than individual prepositions. Unfortunately, I don't know of any resources that take that emphasis, other than just reading a lot of German and seeing what gets used. The good news is that, if you keep at it and don't overthink it, it'll happen.
As you can see at the top of the page, Duo's preferred translation is "At the bottom," which is correct. Also, in the comments it's been pointed out that Duo has been responding to the incorrect answer "On the ground" with the suggestion "At the ground," which is not normal English. Unfortunately, there's currently no way to officially report an incorrect response to an incorrect answer.
Grund has the meaning of ground (Boden), as well. One can just check it in DUDEN. The meaning of the sentence is rather vague, therefore rejection of the translation "on the ground" is rather arbitrary to my understanding.