I d be mortified if my grand kids (especially if I was close) didn’t invite me How much smaller can you get than parents grandparents and siblings. Mum (dad already passed away) up to 8 grandparents maybe less if they aren’t all living and siblings looking at around 20 or less people ……That’s small
What's small to you may not be to someone else, though, We don't know how many siblings there are, (not that it matters). They may have 6 each, who, with partners would make the wedding quite large if there are step-families too. Plus, the couple are paying per head, so every guest is an expense. Also, even if money is no object, not everyone wants a large affair, and it should be for the couple to decide on numbers without feeling an obligation to anyone.
So often on here we hear about how it is the wedding that matters, not the size of the party. I think the OP needs to respect that, and I can see no reason to resent her granddaughter for wanting to have a very small wedding, if that is her preference.