Something that seems to be missing is that it doesn't have to be ON track, have a combination of Brio/wind-up and simple switchers at the beginning for them to run and play with, I built a simple oval with a central siding for an industrial or passenger station terminus, and let my grandkids play with ALL of the trains on the Brio, floor or simple layout, when they really are interested, I have a Chuggington train that I put on my Overhead layout that they run and watch, often getting dizzy circling to keep it in sight.
My layout is totally command controlled, yet holds their interest when they are with me, we share duties, the toddlers blow the whistles and turn on the culvert loaders and unloaders. They are still very young, but the nephews and neighbor kids all have fun when visiting. Don't get wrapped around the axle on what is the perfect layout, build a simple under the bed layout and let them grow into the larger layouts. As for building, if you have interesting tasks and ideas, i.e.; a farm, a playground, a parking lot with cars, trucks and motion which stimulates their imagination, you nurture their play and encourage them to enjoy whatever form it takes. I find that under 4 last 15 minutes before on to the next THING, as they grow older, have a project on the big layout planned when they visit, have them help complete it, then play with the finished area if possible, at least having a task along with fun adds to life lessons which are a part of this hobby.
It is ONLY expensive when you have to have the latest and greatest of what is offered, a simple kid friendly layout can be built with trains they can play, wreck and revive for under $200 and have play value beyond belief. Have a crane, a coal loader (397 is a great kid pleaser, especially if flinging coal everywhere) and an industrial section with duplo or lego blocks where they BUILD the load for today, branch out into more complex things as they age and mature, but NEVER forget it is ok to be a kid, a Grandparent should have that inner kid in him, and show the grandkids it is ok to keep some of the FUN in life even as we grow old. Trains have been, and might ALWAYS be, the catalyst your grandkids, family and neighbors use to find their passion in life. There is NO wrong way, as long as you show them your wanting time to play and share in fun activities.
If your grandkids are old enough, schedule an operating session where you build a train, deliver the goods, and show them that commerce happens in almost everything they see on a daily basis, for me, this is the biggest payoff with teens I share my layout with, they want to learn if it is fun, and find that it doesn't have to be a PlayStation or electronic game to be fun.
