Within walking distance your hotel, I like India Gate and The Sitar:

http://www.sitarrestaurant.net/

http://www.indiagatefood.com/

Sitar is better, India Gate is closer. Your call

However, while both are good, neither are outstanding. For that, jump in a cab and head to Vij's or Maurya. Vij's is world-famous. Literally.

http://www.vijs.ca/index_in.htm

...getting a seat at Vij's can be very challenging. They don't take reservations, so the best plan is to show up at around 5:15 and wait until they open at 5:30. You can read more here:

http://www.yelp.ca/biz/vijs-restaurant-vancouver

Maurya:

http://www.mauryaindiancuisine.com/

Both are walkable too, but it's a good 35-45 minute walk from your hotel, over the Granville bridge. The views from the bridge are great, but at the end of the bridge you've got to climb a bit of a hill. Burns off calories before dinner though

>looking for an East Indian Grocery Store around the area

There aren't really any downtown. For that you've got to head to the "Punjabi Market" neighbourhood:

http://en.wikipedia.org/wiki/Punjabi_Market

From downtown, take the Skytrain east to the Main Street Station, then catch a Main Street bus going south. Get off at 49th. It's pretty easy - About a 1/2 hour journey in all.