According to this article …
http://logophilius.blogspot.com/2015/10/how-mcdonalds-marketing-made-us-grimace.html
… until the early/mid-1970s, "grimace" was pronounced "grih-MAYS" (rhymes with "face"). But when McDonald's introduced "The Evil Grimace" to their McDonaldLand commercials, they chose to pronounce it "GRIM-miss" — which pronunciation stuck (probably given the fact that it's not a word that's spoken aloud very often).
[http://mcdonalds.wikia.com/wiki/Grimace]
And, yes, it was the "Evil Grimace" originally (for drink-stealing values of evil), and he had an extra set of arms. Just like the Hamburglar was scarier looking when first introduced, too.
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Is that a tiny Jodie Foster?
+Al Hunt Apparently, yes: http://the-back-row.com/blog/2011/02/16/before-they-were-stars-jodie-foster-in-a-batshit-scary-mcdonalds-commercial/