I’m giving my old phone to my grandkids for games. Do Ineed to create a new Apple id

See this Apple article: What to do before you sell, give away, or trade in your iPhone, iPad, or iPod touch

What to do before you sell, give away, or trade in your iPhone, iPad, or iPod touch - Apple Support

Then remove the old phone from your account, see this Apple article:

Check your Apple ID device list to see where you're signed in

Check your Apple ID device list to see where you're signed in - Apple Support

Create an Apple ID for your grandkid -> See this Apple article: How to create a new Apple ID

How to create a new Apple ID - Apple Support

Yes. Unless you want to give them access to your own Apple ID and by extension all your data, photos, email, messages, calls etc...

Apple IDs are personal and should not be shared.