Long before she died, my mother was talking about going home to see her parents (dead some 30 odd and 50 odd years)at a house where she hadn’t lived since before WW2. She thought they ‘must be getting old and could do with some help’.
It was just another sign of newer memories being lost. The loss of memories has been likened to bookshelves, newest ones on the top shelf, older ones further down, and they’re gradually swept away, starting with the newest.
TBH by the time my mother died (with advanced dementia) she was unable to hold any sort of conversation and hadn’t known any of her family for at least a couple of years. Having said that, she did last longer than most - largely because she had an extremely strong constitution.
Confusing day and night is also very common with dementia. It doesn’t mean the end is near - it can happen fairly early on. It doesn’t sound to me as if your granddad is on the way out, though of course so much will also depend on a person’s physical health/any pre existing conditions that are nothing to do with dementia.
I do recommend the Alzheimer’s Society Talking Point forum for carers of people with dementia - (just google it.) Many people, including me, have found it a lifeline. Whatever you’re experiencing, someone will have been there. There aren’t often any easy answers, though.
All the best.