Concern over comment made by father-in-law about children. Any thoughts?

My father-in-law has always been a player even before the term was coined. He always had several girlfriends when he was young, kept a couple of girlfriends in Germany during WWII and has always had women in his life. Even in his 70's, he had two women fighting over him and one was calling our house, asking about his schedule, etc. He had given her our phone number, because he changed his own and didn't want her to have it. Outside of my husband, we know of one child from a previous marriage he gave up custody of after a divorce citing physical and mental abuse. We suspect a possible child over in Germany and not certain if there are others from his hometown. We know he took one girlfriend for an abortion (before they were legal). He has commented to my husband on several occassions that he has slept with hundreds of women.
Several years ago, his girlfriend had remarked before she passed that she had to tell him to quit offering candy to children he essentially didn't know because people could get the wrong ideal. I never thought much more about it but it stayed in the back of my mind.
A few years later, I became pregnant and a couple of years passed. I had photos made of my little girl in her Halloween costume which was a ladybug outfit. I gave one to him because well, it was grandpa. She was 2 at the time and he looks at it and says, "well, she looks like a damn 18 year old in that." I was so mortified at the comment, I went out and bought her a new outfit for Halloween because it worried me someone would see her that way.
He also made a comment a couple of years later when I fixed her hair differently that, "she sure is looking older." She would have been around 4 at the time.
I have never left her alone with him (she is never left with anyone besides my mother -- ever).
Fast forward to today. He is homebound and has visiting nurses come in, cleaning ladies and soon Hospice is scheduled to come in. We were told that he is going to get a hospital bed and my husband was going to take the bed down in his room today. My father-in-law became very adament and somewhat agitated that if his hospital bed is put in his room, he wouldn't be able to look out the door in his living room. He explained that he sleeps alot in his chair (special recliner) and that he enjoys being able to see out.
He then futher explained that he likes to look out "at the little black girls that play in their front yard." Well needless to say, my husband is just standing there and then my father in law says, "yeah, I asked their parents a while back if I could give them some money just for them to play outside and they said yes. Sometimes I would take an envelope, put money in it and then put it on the porch steps. I would then yell at them across the street that I had some money for them on the steps. I would go back in the house and then watch them come and get it and take it to their parents."
Now, can someone on here PLEASE explain this behavior to me? I had a family member tell me today that he is just someone who enjoys doing stuff for kids (used to take bikes to underpriviledged kids in his rural hometown) and that by being elderly he is probably enjoying watching kids play and remembing his own youth.
I have never seen anything like child porn in his home, my husband has never mentioned anything about him inappropriately touching any of his friends growing up or anything like that but to me, this is concerning.
Perhaps I am just being paranoid or letting my imagination go where it should not. Any thoughts or insights would be appreciated.