"할아버님께서 원피스를 입고 계세요."
Translation:Grandfather is wearing a dress.
Notice how in your explanation you didn't use a single present participle when explaining what's happening? Are you not referring to the present? Why didn't you say "The ~고 계세요(honorific for 있어요) is making the verb a present participle. So it is refering to no time other than the present. This is making "is wearing" the best translation."?
You seem to use English one way but explain it another way than you actually use it.
I would like to ask you again. Is it really common to use a state verb in the progressive tense (state progressive) e.g. "She is having the book", "I am knowing him"?
As per the reference below, "In English the state progressive is ungrammatical. It may be explained in part by was of regarding stative verb meanings as inimical to the notion that some thing is in progress. Formally, Korean has no such constraint" .
 Suk-Jin Chang, "Korean", John Benjamins Publishing Company, 1996, ISBN 9027238049
This might help.
Imperative Closing Suffixes (명령형 종결어미)
Verbs Inflected with Imperative Closing Suffixes Suffix of the predicate (composed of a verb) assigns the attitude towards the person whom you are talking to.<pre>
Attitude; Suffix; example</pre>
Formal Polite (FP); -십시오 ; 숙제를 열심히 하십시오.
Informal Polite (IP) -세요/셔요; 숙제를 열심히 하세요.
Formal Plain (FC) -라/아라/어라/여라; 숙제를 열심히 하라.
Informal Plain (IC) -라/아라/어라/여라; 숙제를 열심히 하여라.
Reference Lee Chul Young
And it is not outlandish for a grandfather to be wearing a dress. What if the grandfather were into cross dressing? Or drag, perhaps? Just because the norm is for men to wear "masculine" clothes does not mean something like the example is "outlandish." That's a pretty dated thinking.