Grain is never the problem....but noise can be. Grain is Groovy!
The problem here is direct flash, a bad white balance, and some really bad direct flash. I know I said it twice, but flash is BAD. LOL. Ok, not bad, but it has to be done with tender loving care.
I know this sounds crazy, but turn your flash ALL THE WAY AROUND BACKWARDS, get close, and then shoot.
No akward flash, and nothing but yummy ambient light. Try it.