The usual handwave by people discussing Rowling's canon is that any missing family members were probably casualties of the civil war against Voldemort, I think.
There's no obvious comparative shortage of people from any particular age group. Unless the Death Eaters and the Order of the Phoenix selectively went around a little over a decade ago and picked off enemies with grandchildren/married offspring who were likely to go on to have kids, but not non-grandparents with kids - which, really, why? - this is an unsatisfactory explanation. And it'd have to be both sides. We're not just missing Molly's Prewett ancestors, we're missing Abraxas Malfoy too.
[Update: and now there's a fifth discussion thread, which you should probably use in preference to this one. Later update: and a sixth -- in the discussion section, which is where these threads are living for now on. Also: tag for HP threads in the main section, and tag for HP threads in the discussion section.]
The third discussion thread is above 500 comments now, just like the others, so it's time for a new one. Predecessors: one, two, three. For anyone who's been on Mars and doesn't know what this is about: it's Eliezer's remarkable Harry Potter fanfic.
Spoiler warning and helpful suggestion (copied from those in the earlier threads):
Spoiler Warning: this thread contains unrot13'd spoilers for Harry Potter and the Methods of Rationality up to the current chapter and for the original Harry Potter series. Please continue to use rot13 for spoilers to other works of fiction, or if you have insider knowledge of future chapters of Harry Potter and the Methods of Rationality.
A suggestion: mention at the top of your comment which chapter you're commenting on, or what chapter you're up to, so that people can understand the context of your comment even after more chapters have been posted. This can also help people avoid reading spoilers for a new chapter before they realize that there is a new chapter.