Grinding sound from rear wheel
There are two main types of cycle wheel, cup and cone and cartridge bearing.  Cup and cone bearings are fairly easy to service yourself with some simple tools, normal and cup and cone spanners and some grease. Cartridge bearing hubs need more specialist tools, presses to install and drifts to knock the old bearings out.

You can tell which sort you have by looking at the axle, if it's got a nut and a thin lock nut then it's probably cup and cone, google some pictures to see what they look like.

If it is cup and cone then taking it apart (only undo 1 side btw or you'll lose the centre of the axle), cleaning the loose ball bearings you'll find under the cones, then regrease and reassemble may sort the problem; however if its actually as bad as you sugest the ball bearings may need replaced and if the races that the ball bearings sit on are pitted then the wheel may be beyond help. There are lots of videos on the web showing this process.

If it's a cartridge bearing hub then your local shop might be the way to go unless you want to invest in some tools.