Learn Spanish (Latin America): Mi abuela tenía muchos cascanueces.

Cascanueces is a compound noun made from the verb cascar (to crack) and the plural noun nueces (nuts). In Spanish, when a compound noun is formed by a verb plus a plural noun, its form stays exactly the same in both singular and plural. You only change the surrounding words to show quantity, like using muchos here instead of un.

Since nuez is a feminine noun (la nuez), why do we use the masculine word muchos here?

Even though the root word nuez is feminine, compound nouns made of a verb and a noun are almost always masculine. Because the combined word cascanueces is masculine, quantifiers and adjectives describing it, like muchos, must also be masculine.

Why is the second half of the word spelled -nueces with a "c" if the word for nut is nuez?

In Spanish spelling rules, words ending in -z change the z to a c before adding -es to make the plural. So the singular nuez becomes the plural nueces, which is then used to build the compound word cascanueces.

Why use the imperfect tense tenía here instead of the preterite tuvo?