I don't think size generally correlates with extra problems, either as an advantage or a disadvantage, generally speaking. As to whether it would be sufficient for you and some grandkids, that's really hard to say; it depends on the personalities involved, your expectations, the ages and general stature of the grandkids, and a host of other things. I would look for a decent size cabover bunk to minimize the effort in transitioning from daytime use to nighttime use and back (if you don't have to fold up a dinette table, that's a definite plus).
A corner bed can be hard to make and inconvenient to access, particularly with more than one person sleeping in it. If the person next to the wall needs to make a nighttime run to the bathroom or whatever it may well mean waking the other.
More important than age in my opinion is condition when buying a used motorhome. A well-cared-for 2011 can have lots of life left in it with (comparatively) minimal problems if you also take care of it. A two or three year old unit without proper care may be in worse shape.
For what reason are you particularly drawn to smaller units? Some reasons are very good (the spot where you store it is only so big), some are reasonable but very often overestimated in importance (you can find more campsites to fit smaller rigs), and some in my opinion just really not true (shorter units aren't really easier--or harder--to drive down the road, though of course maneuvering in tight quarters is a little easier with a smaller vehicle).
Your budget should be sufficient to find a quite nice unit indeed.