I think you should get the veil, touch up granny’s dress the best you can, and hire a professional photographer. Get pics done with your mate in that dress.
And consult with someone who may be able to fix it if you want to wear it.
Grandma’s dress is stunning and gorgeous. Also, I am genuinely bewildered at all the commentary about needing corsets and whatnot. Literally the first thing I thought when I saw the photo of you in that dress was, “Wow, nice figure!”
If money wasn’t an issue what would you want to do? Would you really like to wear grandma’s restored dress?
If you can afford it, without borrowing money, I’d go with your heart’s desire, whichever dress that might be. A woman looks best in something she really likes, and you don’t want to look back with regrets on this special occasion.
If you want the all enveloping look: If your local stores don’t have the width of chiffon/tulle/whatever that you need, consider buying on the internet or making a quick trip to NYC’s or LA’s garment district. You need at least 108" to 120" (9 feet-10 feet) wide by the length of the veil for a train. You can round the corners for a smoother look. If you want a more open look or no train, 60" to 80" will be adequate.
Yeah, I love Grandma’s dress, and agree it really stands out, but I’d start getting it dry-cleaned and restored with the modern dress as a back-up, just in case the older dress doesn’t stand up to the stain removal and whatever alterations it needs!
FWIW I love the sleeves as they are, and don’t think you need a corset either.
I think it was a yard and a half of 45 inch wide. I got it in an Indian fabric store for !0/yard. It was ballet-length, probably a yard and a half, and I cut the bottom in a wide curve.
My wedding dress (bought new) came with a couple of loops on the underside of the train, but no buttons. I was supposed to work with a seamstress to figure out how we wanted the bustle to hang and she’d add buttons to match. (Fortunately my Mom is plenty skilled in these arts.) There’s a really good video illustrating different bustle types here. I ended up doing a French bustle with one ‘pouf’, but attached at three points instead of one.
WOW. The bridesmaid dresses are practically made to go with your grandmother’s wedding dress.
You look fine - you do have a lovely hourglass figure. 
What if he doesn’t fit in it? 
I’m having a hard time getting past the look of the model to see the actual dress - she looks like she’s about two minutes away from vomiting or passing out!
Love the bridesmaids dresses. I like grandma’s dress, but honestly don’t love it. Just not my style, I guess. I do think it fits you beautifully, though, and the history is very cool.
Are you sure the store won’t take back the new dress? From my understanding, it hasn’t been altered and you’re paying them $300 to keep it at the store (seriously? ouch)…thus, it’s never even left the store? I’d be pressing for a refund; at the very most I’d think they’d ask for a restocking fee, but I think even that is unreasonable.
Yes, that has to be the worst-looking model I’ve ever seen–she looks about 5 minuets away from death. That dress looks like it would be flattering on lots of figures, though.
Another option is that depending on your location, you may be able to find someone who can recreate your gma’s dress (just more updated) in your budget.
Perhaps the two small loops go over fingers?
I’d like Grandma’s dress is you took the sleeves off, or made them drapey sleeves and lowered the neckline. But then it may just end up looking like a shiny nightie. That said, I think the flow of the dress is much more flattering to your figure and makes you look nicely hourglass shaped. Ignore the stuff about the tummy-my sister looks pot-bellied in satin and she’s 110 pounds and a size 0. If you want to wear satin, that’s fine because personally I don’t hate on a little belly pudge, but if you are sensitive to that, there are other fabrics that will drape better.
In terms of the dress you bought-don’t hate me, but I don’t think it’s the right look for your age. I don’t like it at all, think it’s frumpy and kind of non-descript. Grandma’s dress at least has something distinguishable about it.
My advice is to sell the first dress, take Grandma’s dress with you shopping and get a modern-ed up version of it. Maybe you could try J.Crew?
Absolutely Grandma’s dress. It suits your figure a million times better. In that one, you have some serious curves and a tiny waist; in the new one, you look like you’ve been shoved into something that was intended for someone who’s a different shape. (BTW, I don’t mean slimmer - just differently proportioned.) Also, the new one is - in my opinion, which is worth exactly what you’re paying for it - kind of uninteresting.
Yeah, though, the sleeves need de-poofing.
Oh do wear Grandma’s dress. I think it’s just bad lighting that makes it look “unflattering”. (You also don’t look very happy!) I think it’s absolutely gorgeous, and I love anything vintage. The modern one just looks like every other gown out there.
I’m also envious, as neither of my grandmother’s dresses are available. My mother’s mother’s dress is nothing more than a rag, the jacket is missing, and Grandma is too tiny it would only fit a ten-year-old. And my other grandmother’s dress dry-rotted years ago. 
Congratulations!
Before even reading the other posts, I just want to give you my initial thought: the $180 store dress is 1,000 times more beautiful in composition AND on you than grandma’s. The sleeves on grandma’s would definitely have to go. . . but that satiny business is very dating. Even the way the seams are seem (heh) awkward.
Now, on to read two pages of posts surely disagreeing with me 
And (after reading) I actually agree with the idea on the first page: have grandma’s made into a fun reception dress!
I still think she should just have a photo shoot with granny’s dress and a nice headpiece.
Sleeveless satin wedding dress.
Longer sleeveless A-line satin dress.
Elastic-woven satin v-neck dress.
Some ideas for possible alterations to Grandma’s dress - I think the sleeves definitely have to go. Part of updating the dress would be de-poofing those sleeves.
Grandma’s dress looks dated and not very flattering to me-- as other posters have said, it’s kind of nightgown-ish. I would go with the original dress, and if you’re really attached to the other dress, wear it for the reception.