There are more problems than I thought.

I took apart the grinder and removed the bearing.

After a little bit of "working it" it became much less stuck, so I put
it back on the shaft and tried to reassemble the grinder, to explore
it further until I get a replacement bearing.

Upon reassembly, the grinder seemed to have too much friction again.

So, this could possibly be some alignment issue.

This is now what my question is about, however.

Right now I hold the grinder together with just two through screws
instead of four.

When it runs (I spin it up with a drill and then start), there are
little "booms" felt inside. If I look through the two holes for the
through screws, I see that these booms are electrical sparks.

I would like to understand what is the nature of those sparks, perhaps
they suggest sparking between the armature and the case? If so, would
a good blowing with a compressor help, or is this grinder perhaps
hopeless due to bad insulation?

i