It appears your grandchild wants more of the cuddling. I am a grandmother also. We have a tendency to spoil grandchildren more than we may have done our own.
To break this habit is tough but possible. A child is a child and an adult is the adult. Set his bedtime at the same time each night, making sure he is dry and feed. Do not cuddle before bedtime or when he wakes up. Put him to bed and when he wakes up in the middle of the night crying go in an make sure he is okay. He will probably reach out for you, but you can't pick him up. Just say go to sleep in a pleasant and calm voice. You can use a night light that is not visible to avoid the light being too bright. Do not go in and check more than twice. A night or so later check only once. He will cry even louder than usual because he is not getting his way. But when you have assured that he is okay leave the room. When he sees things are not going to go his way he will stop this habit.
Others things to check is to make sure he does not sleep a lot during the day. A nap after lunch is enough. You don't want him making up for the loss night's sleep. He must be a cutey and sweet for you to allow spoiling him. I understand. My granddaughter does not like not getting her way. When she is with me she does not get her way and understands there are limits and rules. Our children must understand life has rules early on. Good luck and God Bless. Don't feel guilty. Everyone must do the same thing or this won't work. It will be hard because he won't be getting his way, but you have to perserve.