Can she read?
I think I have some audio processing disorder, but I am not sure that it's very severe. I can't lay out exactly what it's like, but:
When someone gives me a list of multiple things, I don't understand anything past the first 1-3 items. My father would rapidfire a list of instructions at me, like: "Clean your room, do your laundry, wash the dishes," and I would hear "Clean your room, asdfjiga, uascmv asdfiopgfaj aspoudrvf". My mother worked out that I had some kind of problem when I was four or so and would give me one thing at a time.
I am very visual - you found that with your granddaughter that it's easier for her when you show her. If someone just explains something to me, I may very well not understand what's expected and get intensely frustrated and thus find it harder to work it out myself. It may be a good idea to explicitly show her what you want while saying it. If it's more complex than a single sentence and she can read, it might help to write it down or type it out.
Also, when it comes to sounds, more sounds while I'm confused makes everything worse. Whatever I hear tends to continue in my head like I'm still processing it, and more words will just overlap what's already there, making it difficult to process anything. I end up with a "cluttered" feeling in my brain, and I need to take a cognitive break (like, sleep for an hour or two, or more) to clear everything out. It's hard to think around the clutter, and trying tends to make that worse too.
I'm blanking on other relevant information right now.