If your child is smiling and seems happy, loves to play in water, has jerky movements, short attention span, along with symptoms you describe--you may want to look up Angelman Syndrome. It is very rare, affects both boys and girls, but it can be accurately diagnosed with genetic testing. Eyes are possibly affected with strabismus, usually, but so few cases have been diagnosed that it may be possible that your son's condition would fit. We are in process of exploring this diagnosis for a relative and your description seemed to strike a chord, but may not be relevant. A description of symptoms is at http://www.angelman.org/BriefDesc.htm I wish you the very best with your child! S.
I really think that you should get a second opinion and change doctors. I feel really bad that your baby is experiencing these problems, I am not a doc but do think that the baby should be on vitamins so that you can make sure that he/she will be getting more than enough nutrients due to the fact that the baby is almost two and is still on baby food. Try mashed potaotes and regular Quaker oatmeal.
Yes, you should be concerned, because your grandson does appear to have some delays in several areas of development. It would be wise to seek a thorough developmental evaluation. This will determine his status in the various spheres of growth and development. Determination of such status will indicate if he displays some developmental disorders and if specialized treatment is required.