This is another bubble head level. You have a rope to get up to grandpa. There's a blue coin beneath him. Also one-up you can spray with water in ice. Now down into water. Scary music!!

Shoot the water at him so he comes out. Now go into his mouth (not too close) and then spray off his teeth. Go out for coins when running low, lots around. Use your hover-blasts to clean each tooth. They sparkle when clean! Some fall out, that's ok.

When all are clean, get shine and he leaves a heart of coins :)

Super Mario Sunshine Walkthrough