I'm not sure I understood this story. I was interested in the family, the traditions, and the family dynamic, but I didn't really get what was supposed to have happened. Was Grandma cursing people by writing their names on candy skulls? I think that's what happened, but I wasn't totally sure, and I wasn't sure how the girl reacted to it.
You are correct in that assessment. It's considered bad luck to place the name of a living person upon the alter to the dead, especially with the name of there namesake saint, at least that's what I was told growing up. You'll find that Day of the Dead traditions vary greatly from region to region.
As far as the story itself, I liked it, if only because it conjured up memories of my own childhood, both good and bad. I do agree with the other posters that the story was a little ambiguous and I had to listen to it twice to understand what was going on.
I think the story would have played out better if the girl had a stronger presence in the overall story, she was too removed from the action. Maybe it was because she was too young to fully grasp what was going on, but she was aware of the illegal activities that both her aunt and other people were involved in so I was a little confused there.