Easy yes to both of these.
You can bind any middleware you like into the middle of the express stack like this:
keystone.pre('routes', require('connect-livereload')())
Like it sounds, this will include the middleware before the routes are processed.
On the grunt serve thing, I haven't tried the generator so can't see the grunt file but it should have something that starts the script express.js. Just change that to keystone.js.
Failing that it's probably just running something like
or
(the second watches for changes and auto-restarts your application, which is nice sometimes)
You don't actually want to run the express script (as keystone.js will do everything for you) so it's up to you which command you want to run to start things ;)
If you have trouble getting that to work let me know and I'll install / run the generator myself, and see what it's doing.