I would say that "inappropriate" is anything that you don't want. It doesn't appear to be a big issue on this one kiss on the neck. How would you have wished he'd done it (given you a kiss of affection?) I mean, grandparents do love their grandchildren

If you tell your grandfather not to do that any more, and he continues, then it's "inappropriate."

(Forget the physical parameters ..."under a bathing suit" that's ridiculous to set that as a guideline! If you don't even want someone in your personal space (generally any closer than 12-18") and they are, then they are being inappropriately too close!)