is this saying that he was born in hawaii
It's saying that his mother gave her parent's address for use on the birth certificate, and that she lived there(rented?) afterwards.
No. Indeed, it's strong circumstantial evidence that he probably wasn't. Then and now the Hawaiian law regarding birth certificates provided that the original, basic birth certificate, the "Certificate of Live Birth," as all such documents were and are actually entitled, could be acquired either by: 1) being issued by a hospital or other birthing center and signed by its designated officials and the attending physician or 2) if he child was not born in a birthing center, by one of the child's parents filling out and signing the Certificate. In option 2) there was and is no requirement of notarization and no requirement of corroboration and independent verification. Hence, if the Illegal Alien was born in Kenya, it would have been a piece of cake for Madelyn Dunham to make him into a "natural born American" by completing a fake Certificate showing him born at the Dunhams' address, forging Stanley Ann's signature to it, and mailing it in.
Use of the Dunham address in the newspaper notifications indicates that's exactly what happened. Thereafter, all of the subsequent secondary documents, including the newspaper birth announcements and the "Certification of Live Birth," were legally produced, being based on the original fraudulent Certificate, without anyone having to do any other illegal acts (GIGO).
No, it only says white granny has some association with the address on the announcement. No where is there any proof he was born in Hawaii, Kenya, or the moon.