I assume your grandson is aware of your diabetes since you've been one well before he was even hopping on you. So I would just show him your "new way of taking insulin". When I got my first pump our kiddos were near your grandson's age. I just showed it to them, told them I would use this instead of an injection every day, and we went on with our fun and games! I never warned them about the device or my site, I chose to put the responsibility of protecting my pump and site on myself. A five year old is pretty young to go into a lot of explanation and detail. Why open a door of weariness, it would be sad if your grandson became afraid to play with you. As Gary said, the pump is pretty durable, and even wresting with little ones never once messed up a site for me.
Your question is a really excellent one and I think it is a great idea to have some type of literature for this type of thing. I need a project after the summer time is over so I am going to chew on this. I am going to ask the kids what they thought of my "new way".
Please let us know how you do handle this, and how it turns out! Have fun playing :)