Probably silly but...

When you host a multiplayer game, if I’m understanding correctly you actually host the session on your local PC. If someone knows what they’re doing, is it possible they can join a hosted game and use the connection to hack the local computer or is that crazy? (I suspect it’s the latter but am not 100% sure.)

Sure, it’s “possible” if you’ve taken basically no means of protecting your computer such as never updating security, disabling firewalls, etc. Nothing associated with the game itself would put you at risk on it’s own though.

I believe it’s theoretically possible, IF Grim Dawn’s network protocol has any suitable security flaws. Generally speaking, though, the sorts of people who spend time & effort in finding such flaws (if there are any) for the purposes of exploiting them aren’t interested in the minute number of potential targets available through GD mp games when they can spend similar amounts of effort on much more widely used protocols (or writing viruses) that target millions of computers.

So unless you have a dedicated and technically capable enemy(/friend) who wants to target you specifically for personal reasons, it’s a non-issue. Also, although I’m not familiar enough with Windows’ process architecture to know any details, I strongly suspect the damage someone could do through a hacked Grim Dawn process would be somewhat limited.