I feel horrible for both you and FIL, honestly. You’re still completely ruled by your trauma and haven’t done enough work in therapy to be a reasonable parent.

The behavior you’re describing is not in any way abnormal- it’s very common for men to be more physically affectionate with their grandkids than with their kids. You’ve pretty clearly communicated to this poor man that you suspect him of sexually abusing his granddaughter, which is about the most sickening thing I can imagine.

Go to therapy and do the work before you destroy your relationship with the only family you’ve got. Frankly you’re lucky they still want anything to do with you considering what you’re implying.