Should tune be the noun Grandma and Grandpa dance to their favorite tune?
I think it should be grandma and grandpa because a noun is a PERSON (or people), place or thing. Hope it helped :)
In your sentence, Grandma and Grandpa are both proper nouns. Tune is also a noun. Those are the only nouns in your sentence, therefore, your only choices. If you choose Grandma you have to choose Grandpa too because they form the compound subject; you can't have one without the other. Tune is the only stand-alone noun in your sentence. It serves as the object of the preposition, to.