Luckygirl this is much like my family (5 children) and their involvement in the illness (and deaths) of both my parents.
I think it was best to tell the truth and we found they took it in their stride. Being honest meant they were not left in doubt and worried about the process and the older ones could ask questions and not worry that we would hide things from them. We were asked both times, will Grandpa/Granny die and we told them that they might but we were all doing everything we could to not have that happen.
We were honest with them, so they knew it was a serious illness (both times) but we tried not to give them more information than they could understand. Some things we had to repeat to the younger ones in particular. "Yes, Granny is having some really nasty medicines but we are hoping it will make her well again".
Later, in our case the prognosis was very grim. I was glad we had been truthful earlier. We had to say "the medicine/surgery didn't work for Granny so now she is just going to stay at home and be cosy with us".
The children felt involved as they could make her feel better by reading to her or one of the little ones might "help" her by drawing a sunny picture for example. My 10 year old used to stand at the window and offer a running commentary on the birds in the garden.
In your case there is the possibility (and hope) that the chemo will work and of an operation too if need be - so you are in the fortunate position of having hope that things can be sorted and he will get well. You are not at the end of the road by any means and I'm sure all of us here on Gransnet hope all goes to plan and these worrying times are soon put behind you.
It's lovely that you are close to your grandchildren and that you are concerned they don't lose trust. I think yes, do tell them, encourage their mum and dad to talk about it with them. The more "normal" and less secret it is, the easier it will be for them I think... and ultimately, the easier for you and your dear husband.
Thinking of you. 