When you add a new application, the profile that flows to the contact tab is the primary contact for the grantee ( the *'d contact on the contact person's tab). 

The address used for the primary contact is the address on their profile 1 tab. If there is no address for the primary contact, the grantee address is used.

If there is no contact person on the grantee, then the grantee address and organization name will flow to the contact, and the name field, if available.

When reporting in grants, the organization name on the contact name is used for the grantee name if available.  If not available, the contact name will be used.  If both fields on the contact tab are empty, the grantee organization name from profile 1 will be used.