Is the Fisherprice doll house plastic, or wooden? If it is plastic, I wouldn't keep it. My parents kept my Barbie doll house in the attic - the furniture was still good (and my girls play with it now), but the plastic walls of the house got brittle and it disintegrated. That's a lot of space to take up, for something that might not keep well. Same with the sit n spin. If you are keeping them in a climate-controlled basement, then maybe. But definitely not in the attic.
I wouldn't keep big playdough toys, either. Honestly, we have a lot of playdough stuff, and the kids and their little friends prefer to use plastic easter eggs and plastic silverware with them, over the playdough toys. Maybe keep some of the smaller molds, but not the big playsets.
Keep the Barbies and the Hotwheels. Mom saved ours from when my brother and I were kids, and they are endlessly fascinating for the grandkids.
As for stuffed animals - ask the kids. They might surprise you with what they want to get rid of. And they will eventually outgrow them, anyway. But the grandkids think that stuffed animals make Gram and Da's house look more kid-friendly, so maybe keep the cuddliest ones? (The tags say not to, but most really can be machine washed and dried, if that helps.)
Keep the dvd's for now. If space is an issue, then put the discs in CD folders and discard, recycle or even donate the cases. It is just so much more fun to flip through a physical box or folder of DVD's than it is to click through a menu with a remote control. Plus I'm guessing the grandkids will enjoy the "old school" feel - sort of the same way my kids are fascinated with vinyl records.
Other than that, I would definitely keep the wooden toys and puzzles you listed. (I am unfamiliar with geo tracks?) I don't see the Diego playset being a keeper, either - it's been a while since I've even seen Diego toys for sale, and I haven't seen new episodes in a while either, so I'm afraid that is a character whose time is up (sad, because we love Diego!).
Also, keep any classic or favorite children's books you have in good shape. My kids love reading a book at Gram's and knowing it was mine.