"Opa" is often used instead of "Großvater" when you're talking to your grandfather in an informal warm sense.
Technically I think this would be "Hello, Grandfather" in English. Not that it matters much when you're supposed to be learning German.
I wondered about this too. Does German not indicate direct address with a comma?
The honorific form of address and separate accentuations, for instance, are separated by commas in German. http://www.duden.de/sprachwissen/rechtschreibregeln/komma#K132
Yes, Grandfather should be capitalized because here it is being used as a proper name, in contrast to saying "He is my grandfather" where grandfather here is just a common noun.
Shouldn't it be "Hallo, Großvater" instead of "Hallo Großvater"? It's proper punctuation.
I dont have this character that looks like a B and is pronounced like "ss"... Can i replace it with any other one?
Use the alt code. It's awesome. (Simply hold alt and type in the numbers and let go of alt [use the number pad numbers]) ä = 0228 Ä = 0196 ö = 0246 Ö = 0214 ü = 0252 Ü = 0220 ß = 0223
on the computer if you can use/add the international keyboard it's pretty useful too, just [Right Alt]+S
Basically you can call your own grandfather whatever cute name you want, but for Duolingo stick to using the literal term "Grandfather" for Großvater. On questions that use the familiar term Opa, feel free to suggest whatever you think are commonly-used familiar terms in English.
(P.S. "Is it wrong?" in English would be Ist es falsch? auf Deutsch, and in both languages the space goes after the comma, not before.)