OhWhyNot - Because in the main I don’t think you are talking bollocks at all.
As I said, I think you had a very vivid dream, which felt disturbing enough to talk about the next day.
An adult took your description of an old man with the name of your grandad and ran with it the next morning, making all the same sort of connections that people look for when they hear a “psychic” give a reading. After all, the only reason you are now convinced that this was your friends great grandad is because of the response you got from the gran.
She told you she saw connections, you are having to trust that what she said was accurate and totally unbiased.
You say you described a coat accurately. I’d query what language a 16 year old would use to describe a man’s coat of a style from many decades earlier. Were you describing whether it had a peaked or a notched lapel for example, or we’re you saying long and tweedy? Unless we know the exact words used we have no idea how generic the description was. How many coats did the man own, how many different styles? How likely was it that your description would have been close to one of them?
What did the gran say? Did she ask any leading questions at all? The sort that aren’t permitted in court because a witness can easily be led to embellish what they saw. I wouldn’t trust your own memory on that as people are terrible at noticing that sort of thing, that’s why you need transcripts to be absolutely sure (if only we had one!!)
You say the arms were outstretched, he was in pain. That sounds like a classic description of a horror trope (zombie type aspect, arms reaching out to get you, or perhaps influenced by religious imagery, a pained Christ-like pose?). I wonder if the gran have any religious imagery in the house at all that might spark a young persons imagination.
When she heard that description it was her that then linked it to a specific thing to do with the man’s hands though. That’s the classic pattern of offering some information but the other person doing all the work - she found a meaning because she wanted there to be a meaning in what you were telling her.
None of this was you talking bollocks. You were honestly describing a weird dream experience, but the person you were with gave it a whole new meaning and then fed it back to you, making it something wholly different.