Ah, your question reminds me of just how much children are affected by the disagreements and conflicts of adults around them. The conflict creates so much anxiety for them (many questions swirl through their young heads such as, "Are they fighting because I have been a bad boy?" "Will they break up?" "Will mommy be sad?") Children can cope with this anxiety in a number of ways, but the truly brave will try and take control of the situation (generally an adaptive coping strategy) and attempt to mediate the conflict. But, alas, children do not have the skills and/or maturity to effectively mediate the complicated minefield of many adult relationships.
Because of the extreme anxiety that conflict between adults causes children, I think that you should start by talking with your daughter. Explain to her that fighting with her boyfriend in front of her son is upsetting to him, and she and her boyfriend need to set boundaries around their disagreements. It is healthy for children to see adults disagree and come to a reasonable agreement or compromise, but when their fights become too frequent or escalate, they need to "pause" their fight and return to it later when her son is asleep or they are alone. If her son tries to mediate, that is a sign that they need to "pause" the fight and return to it later when he is not present. Thus, it should be the adults responsibility to work through their disagreements in a way that is not as upsetting to your grandson. I imagine that your daughter and her boyfriend are doing the best that they can, but gently remind them that they need to role model healthy conflict management for your grandson.
You and your daughter can separately, and together, explain to your grandson that it is not his responsibility to mediate adult conflicts. Although he is a very special boy with many talents, he does not have the skills to be able to solve the problem. His job is to take care of himself when he is feeling worried during their disagreements. Come up with a plan for what he can do when they fight and he becomes upset. Perhaps, he can go to his room and play with his favorite toy or listen to some music to help calm himself.
Your grandson is very lucky to have so many caring adults in his life. Helping the adults to shoulder the responsibility of tough life issues and teaching him positive coping strategies will help him now and later in life.
L. Kauffman, Ph.D.
Licensed Child Psychologist