J.B.
Oh, this is tough. When my oldest was little, he started asking about dads when he was 3 (late talker)...why does Joey from daycare have a dad, where's my dad, my dad is going to pick me up and make me peanut butter sandwiches, my dad is going to do...whatever. Thing was, his biological father had left while I was pregnant so he had never met him.
I just kept it factual - here are some the responses I gave to different questions: everyone was made by a mother and a father, your father moved far away and I take care of you like two parents would. In some families, the mom and dad live together and in other families, they live apart. Some kids live with different parents than the ones who made them (in a conversation that segued into explaining a friend who adopted her nieces). Some kids live near both of their parents and spend time with both, some live with just one parent, like you and me (but aren't we lucky to have grandma and grampa and aunts and uncles too!).
In your situation, where she is younger and has known her mom, I would stick with keeping it simple for now and validating her feelings. "It sounds like you miss mommy" or "being apart from mommy makes you sad" along with "mommy lives far away now" or something similar, and then try to move her on to something else. I think it's important that she knows it's OK to miss her mom and be sad, and reassure her that her daddy and the rest of her family will take good care of her. That she was attached to her mom is emotionally healthy and what you would want to see - it would be unhealthy if she didn't connect with her and miss her in this way, so keep in mind that this is a positive and healthy reaction even though it hurts to see her hurt by her mom's absence. I wouldn't offer false hope about seeing her mom (it's amazing how they can latch on to a hope like that an even an early age).
Best of luck to all of you - my step-daughter's mother abandoned her to us when she was 13 and it's something that my SD will carry with her for life. She's a great kid and is happy and successful (she just turned 18 and is applying to colleges, etc. - all grown up now!) but she will always have to live with the emotional scars. I don't understand women who can't get it together enough to raise their children, but luckily your granddaughter has her dad, you and your family to fill that void, as my husband and I, and our extended circle of family and friends, were able to do for my SD.