Size in dreams is often symbolic. People/ things that are big in a dream reflect the dreamer's awareness that person/thing is a big issue in their life. Conversely, people/things that are small in a dream reflect an awareness that they are a small issue. The fact that the granddaughter is in diapers, reflects your awareness that she is a baby. The fact that she is tall suggest your awareness that she is a big issue. But, because dreams are expressions of the dreamer's feelings about their waking life, the "big" granddaughter issue may extend beyond your feelings that the granddaughter is a "big" issue for your co-worker, to you own "big" feelings surrounding having a granddaughter. As the dreamer, only you can say for sure.
Hope that helps!