OK Anon, I’m out of the fandom now, but I’ll explain. In Japanese culture, being gay and being trans are seen as one in the same. Gays are thought of as wanting to be “real” women to be “normal”. To Yana, a Japanese writer, she most likely incorrectly assumes that the character she states she wrote as a gay man would want a sex change so that he could be with other men. LGBT rights are very bad in Japan, despite what you may think. Also, Yana wrote Grell as a gay man, as you can see in out translations, and all of the official American sources refer to him as a man. Grell refers to himself as an okama, which means a feminine gay man or a transvestite, a trans woman would never call herself an okama. Grell is really just a blatant stereotype and shouldn’t be taken as a serious character for gays or trans women, no matter which way you slice it. He’s very much the product of a society that’s still in the dark about most LGBT things and mixes them up. TLDR Yana intended to write a gay man, and she made the character trans by her lack of understanding.
LGBT community in Japan is fine. Homosexuality for one has been around since the Azuchi-Momoyama Period (1573-1603) — for example, Oda Nobunaga and his page Mori Ranmaru had an openly sexual relationship in the 1500s, and it was common in that time period and even before that.
In Japan now LGBT is really not an issue in any way: homosexuals and transgenders have always been allowed to enter the army, and discrimination for things of this nature is rare in Japanese culture and society. The only time sodomy was illegal was in the early Meiji period (1868-1912), and even then, the law that made it illegal was repealed 7 years after it was set in place.
Toboso consistently uses the word 彼, which means “he/him,” to refer to Grell. I agree with the statement above that she didn’t seem to think a lot about what she was doing when she wrote the “interview with Grell.” The only reason Grell wants to be a woman is to have a baby, as stated by him in the manga in Madam Red’s cinematic record. Other than that, I personally see Grell as a somewhat misogynistic character. I think Madam Red had the courage that Grell didn’t, and when he saw her killing women, he encouraged it because without her, he couldn’t go around killing people at random just because he enjoyed it — he made it very clear that he enjoys killing humans as more than just a job. So, Grell used her to do what he wanted, and when she wouldn’t obey him, he killed her. Of course there’s more to it than that, but it’s a very long thought process and it would take a long time to translate into words. Grell is actually quite complicated.
TL;DR: Toboso consistently uses the word 彼 “he,” to refer to Grell, and never 彼女 “she.” Whenever Grell uses terms like 女優 “actress,” it’s for comedic relief. In all honesty, I don’t think gender or sex should apply to a character who isn’t human, because those things are typically only human concerns.