When I am uncertain about precise shades of meaning, I check a dictionary. I really do. American Heritage offers these definitions for "grim:" --Discouraging or depressing: The business news has been grim lately. --Dismal; gloomy: a grim, rainy day. --Stern or forbidding: The judge was grim when handing out the sentence. --Repellent or horrifying: the grim task of searching for bodies in the rubble. Obviously there is a lot of overlap. The reference to "not much of black or white... but all grey" fits the idea of things seen in fog, mist, and rain. You don't see any pure blacks because there is grey mist in between you and the black object, you don't see any bright whites because the mist has cut down the light to a dim level. (Also, white doesn't look "bright" when the light is coming out of a mist from all directions at once, instead of coming mostly from one direction, like the sun.) So the meaning that makes the best literal sense is "dismal and gloomy." However, since the passage is probably talking about emotions, it could also be a way of saying she feels discouraged and depressed. And depending on the situation, it could also include the ideas of "stern," "repellent," "horrifying" if she feels a sense of dread, a sense of being threatened. That is, the author could have chosen the word "grim" to mean suggest not just depression, but depression plus a feeling of threat or doom.

In this context, I think it rather means gloomy/dark/cruel.

In this context, it's gloomy.