The non-letahl option is actually to just tranquilize her.
Almost dropped her.Spoiler: The luckiest Granny
The boss fight is really not very challenging once you stop panicking because of the rat swarm. Defeating her while going for the Ghost achievement is more of a hassle. I got lucky with her teleportations and snuck up on her.
You can also side with Granny and help her cook Slackjaw. This is what the recipe is for, but not fun or exciting in any way. She just needs some help with dragging Slackjaw around.
Spoiler
I think you missed the portrait of the Outsider right above Granny's bed. She is quite the fangirl.
Spoiler
I wonder how Sokolov painted that one.
I though it was a nice touch that the map you can find with her stuff is of Pandyssia. This is where Vera Moray came first into contact with the Outsider which started her on her road to becoming Granny Rags.