No, it's not normal. Stories are likely something to be read and cherished, not licked by a dog. There could be a misunderstanding in what she is actually doing.
There are many heartwarming stories about girls and their puppies. For example, a girl might rescue a puppy from a shelter and then they become the best of friends. The girl would take care of the puppy, feed it, play with it, and take it for walks. Their bond grows stronger every day as they share countless happy moments together.
Granny teaching little girls such things is extremely inappropriate. It goes against all notions of proper upbringing and protection of children's innocence. Such stories are morally repugnant and should never be entertained.
No. This kind of behavior is not appropriate at all. Feet are considered dirty in normal hygiene concepts, and this act violates normal social and family ethics.
No, it's not safe. A dog's mouth contains a lot of bacteria which can cause infections in humans. Even if the dog seems healthy, it can still carry harmful microorganisms.
One of the main benefits is companionship. Puppies are always there for the girl, whether she's happy or sad. They offer unconditional love. For example, when a girl comes home from a long day at school or work, the puppy's excited greeting can instantly brighten her mood.