Translation:My grandfather can speak English.
Yes, Chinese has different worda for every type of relation: mother's side, father's side, older, younger, married in, etc. 爷爷 is paternal grandfather. 姥爷 is materal grandfather. There are actually 5 different ways to say "aunt". In a strict interpretation, 阿姨 means mother's younger sister. It is also the word for someone who takes care of young children, like "nanny" in English.
Duplingo mkst always uses 会 to mean "will," but 要 can also mean "will." I was taught that 要 is appropriate for future events that will be the result of the subjects actions/agency, whereas 会 appropriate for future events that occur on their own, without someone's influence.
I think that 要 makes more sense as "will" for a future action if this will be a special exception to how Grandpa normally speaks. But if you are describing a habitual action (let's say Grandpa lives in Miami: he speaks English with me, but Spanish with most people on his street), in that case I think 会 would fit better for the "will" in a habitual action that will continue in the future.