While this layout makes a nice conversation piece, I would not recommend it for a layout with your grandson, as it is too complete, unless you and he just want to watch a single train run round and around. That will bore both of you pretty quickly.
You need to ask yourself several questions: First, how old is your grandson? How is his dexterity...and yours? Your eyesight may also be a factor. (At 77, I may need some cataract work eventually!) While N scale permits you to get twice as much in the same space as HO, handling the smaller N-scale trains can be a problem. While HO equipment also requires some dexterity, it isn't nearly as much as N.
How much space do you have for a layout? Where will the layout be placed...your home or his? If he really gets into the hobby, will there be room for expansion from, say, a 4' x 8' starting point?
With used locomotives and rolling stock, you don't really know what the condition of the items are. Even if you encounter a problem with new equipment, you can go to your local hobby shop (LHS), or to the manufacturer for help, repairs, replacement, etc. HO will give you a wider variety of rolling stock, buildings, etc. Cost-wise, you will need to decide on whether to acquire DC equipment, or DCC and DCC with sound. The latter will be the most expensive. Some "train sets" may give you enough to get started, but you are probably better off to buy a locomotive (diesel or steam) and a few cars, plus flex track and a few turnouts (track switches) and cork roadbed, or EZ-trak. You will need to buy the proper electric power equipment. A DC power pack will be the least expensive, but will limit you, in case you decide to go to DCC and sound. Buy a few books on basic model railroading, wiring, and DCC BEFORE you start buying stuff.
Feel free to ask general or specific questions. There are lots of people with a lot of experience (and with opinions of their own...including mine)!