It is restorable but it wont be a simple job.
You'll need a complete new 'wood' set. The forends do not just fit from one rifle to another (unless you are very, very lucky) so you will need some minimum wodworking skills to bed it properly.
The bigger issue is the rear sight. The original has been removed - probably by cutting it off - and the 'sporter' rear sight attached.
You will need to fit a new rear sight and inner band fixing which both slide over the barrel BEFORE the front sight is fitted to the barrel.
Not possible with the front sight in place. It would probably involve carefully cutting off the front sight mount (without damaging the barrel), fitting the new rear sight, inner band mount and then attaching a new complete front sight.
What the sights should look like - In the top picture, just in front of the rear sight, you can also see the inner band mount.
In the bottom picture you'll see how the sight mounts to a sleeve which is very tight to the barrel and will not pass over the front sight.
What looks like rust is Cosmoline (storage grease) this had been in storage since 1947 until I rebuilt it into a Rifle again.
With all respect to your Grandfather - if the rifle was like this when he departed, wouldnt it be better to keep it and use it as it was when he last used it ?
With regards to sourcing a magazine you need a magazine for a Lee Enfield No1. Plenty available from dealers or gunbroker.com