Your understanding of this sentence structure is very good. Also, you were able to keep everything in the correct tense. The only mistake you made was not including the commas in sentence (C).

(B) has the same meaning as (A); "have a sweet tooth" is a natural idiom.

(C) has a different meaning from (A). In (A), "who died ten years ago" is an appositive phrase, giving further information about his grandmother. In (C), "who died ten years ago" is a restrictive relative clause, identifying which of his two grandmothers is being talked about. It could only be said if the listener already knows that one grandmother died ten years ago and the other did not. It is a somewhat awkward way to refer to the grandmother.

An appositive phrase must be preceded and followed by punctuation marks. Commas, dashes and parentheses are all possible.

(D) is correct but unnatural, at least in contemporary US English. It might occur in a literary context, but not in ordinary speech.

(E) is possible, but there has to be a specific reason for using the past perfect tense as part of a longer narrative. If this sentence were said by itself, the past perfect tense would be incorrect.