@belleriverjf,
I understand you're trying to resolve a conflict and work towards a compromise. The thing is, they don't see it the same way you do. So, in order to compromise, leaves YOU in a position you really don't want to be in - excluded.
Have you really thought about what a compromise will actually look like?
Grandma will still host Easter, Thanksgiving and Christmas and birthday parties. Except you'll be dis-invited because the biological mom will be there and grandma, using your own logic, will take you up on your offer to minimize conflict.
You'll get respect. At school functions like art shows, chorus/band concerts and graduation. All situations that reside out of grandma's family get together's will become mutual territory.
Again, you want to tell a grown woman who she can or can not invite to her own family's celebrations. I don't think that's going to work in your favor.