I own both the FM2 and the Leica M7, among others.
I'm still trying to get my head around your reasoning, which in my mind is flawed. First off, the FM2 isn't bigger than a rangefinder.
If you use a Nikkor 50 1.8 AIS on the FM2, I hardly think it's too heavy to carry around. I hear this argument a lot on this forum and frankly, it's not true. An SLR like an FM2 with a 50 1.8 AIS is just about the same size as a rangefinder with a 50 2.0.
People are right, it's not the camera that makes the photo, it's what the photographer does with the camera.
On one hand, you're saying the M7 and the FM2 aren't inconvenient (how far is your local lab). And then you throw in the college fund, saying it's a better investment
🙄. You're kind of all over the map and cross-rationalization is not the answer.
First off, if you want great shots of your grandkids in low light and you want digital, get a D700 and the new 24 1.4 AFS or the 34 1.4 ASPH from Nikon. For the money, you can't get anything better for low light, fast AF and IQ.
The other lens you might want to consider is the new 85 1.4 AFS.
Check out the Nikon Cafe "Lens Lust" section for some examples. There are some shots of kids that will make the argument better than anything I could say.
If it's all about getting better pictures, then the first step is to become a better photographer. While shooting your grandkids is your main focus, becoming proficient with whatever camera you have in a wide variety of photographic situations and subjects must be kept in mind.
Taken with Rollei twin lens on Tri-X
Nikkor 24 2.0 AIS on F2AS on Tri-X
Nikkor 135 2.0 AIS on F2AS Tri-X
Nikkor 135 2.0 AIS on F2AS on Tri-X
Nikkor 24 1.4 AFS on D3