Jacob and Wilhelm Grimm collected folktales and legends because they were concerned that as German society in the early nineteenth century became increasingly urbanized and began to industrialize, the peasant culture that preserved the traditional folklore was disappearing - and these oral gems would disappear with them. The Brothers Grimm were not the first to undertake this sort of effort: Charles Perrault (1628-1703) did much the same in France more than a century earlier.

The Grimms - and especially Jacob Grimm - were truly pathfinding in their effort to collect, organize, and analyze the folklore in a scientific manner. In addition, they made a decision to "water down" the stories so they could be published, largely for the consumption of urban families and especially for their children. This required certain changes.

First, folktales frequently took several nights to tell - they could be extremely long. The other problem was that the folktale was adult entertainment - the folk novels for a pre-literate society. Traditionally, children were put to bed or otherwise escorted from the room before a full folktale was told (there is some evidence that the folk, themselves, occasionally told watered-down versions to children, but this was not the original intent of the folktale). This meant that the Brothers Grimm had to take out much of the violence and sexuality that was part of the original folktales that they had collected. Recently, folklorist Jack Zipes published an English translation of this first edition, which appeared in 1812. It provides insight into how much the stories evolved over the subsequent editions as the Grimms augmented the stories with additional titles, removed the few stories borrowed from Perrault, and water down the stories even more.

What Disney did with this material is interesting. The full-length movie format required Disney to increase the length of the stories - which had ironically been shortened for popular consumption! And Disney removed some of the more gruesome aspects, but of course he kept a lot of the violence since that is what makes the stories thrilling.

There is a universe that can be described about this material. I hope I have addressed some of your question; ask more if I need to add more in specific directions.

edit: I see one thing that can be added: the stories were very well received and quickly translated into other languages, inspiring folklore collection throughout Europe. For those who dimly remembered the original tellings, these would have not seemed particularly dark or troubling. In fact, the collection of the Brothers Grimm was extremely popular and highly regarded in the Romantic-era context of the time.