I understand from your post that the other GC gets lots of nice, comfortable-to-accept love (not quite like our situation), but this is how favouritism has played out with me and my family:
My mother was the favourite of her father, and that was transferred to my generation (to my brother and me), whereas my aunt (who was in the UK) did more for her father, and her children were never invited round, despite beinginthesamecountry (my brother and I came to the UK perhaps once a year). Our visits consisted of teas of huge amounts of sweet things (sugar/marzipan mice, crumpets and honey, etc. Probably what he thought children would love). My aunt is still bitter about this, over 20 years after he died.
However, my brother and I were rather uncomfortable with the attention, probably because it was OTT and made us uncomfortable (and the sugar mice were just disgusting), and my mother was, too; she fully acknowledges that she was not here as much as her sister, and cannot think what to do to change it now.
We have concluded that Grandpa was just a contrary, stubborn bugger, whose love was not terribly reasonable. As I mentioned, it made me and my brother uncomfortable and we did not value it that greatly. Sad, that it didn't have the desired effect, eh?
We have also concluded that, although my aunt was NOT being unreasonable to be bloody pissed off with this sort of favouritism, she MUST manage to get past it somehow, as she is making herself as worked up now as he made her then. We think she may have even been making herself ill (she is now over 60).
If you can address the question of "not minding" any more, perhaps don't think of it as forgiveness; think of it as revenge for unreasonable treatment! However it is a shame for your children, and I do feel sorry for them. Are they old/mature enough to understand if you try to explain this to them?
I wish there was something else to suggest, but it sounds as though your side is the only one which is going to change. I do hope you can find a way to detach your happiness from this treatment.