You are not going to be able to keep professionals at a minimum here. I can't answer your questions, but things to keep in mind:
1. If you buy the house below market, then when you sell you're potentially going to have to pay more tax.
2. If he sells it for under FMV to you, then needs Medicaid, then it's possible that there will be complications.
3. The "gift" to his granddaughter is lovely, but see #2.
If you do go forward with buying it, then treat it like any house you would be considering buying. Due diligence so you know what you're getting into, decide if you even want to buy it.
You think 1970s is old. LOL. My house was built in 1919. That said, it would have been constructed differently than houses today. Most likely better actually. A good home inspector can help, combined with the internet.
Start with a real estate lawyer. Check in with your in-law's elder law attorney so you don't screw him accidentally.
Realistically - I'd recommend a 3rd party sale at FMV, and your family buy whatever house works for you. This could get complicated to protect him. If he wants to leave an inheritance, then he can stash the proceeds, or gift her money (carefully). I'm sorry, but he's 95, he likely doesn't have many years left.