Why is Grandpa Portman considered a hero of the island? 

Abraham Portman is Jacob's grandfather, a man who, as is eventually revealed, was a Jew in Poland at the beginning of World War II (see "Setting"). He was also, again as the narrative eventually reveals, a "peculiar" (see below), a young person with an unusual ability - in Abe's case, the ability, which he shares with Jacob, to see the hollowgast (again see below), a monster that feeds on peculiars. Abe's stories of his unusual childhood at first entertain the young Jacob who, as he grows older and somewhat more worldly, comes to regard them as fairy tales.