You can simulate grayscale with dithering, similar to drawing with a pen or pencil. If you really need grayscale or color you can buy eink displays that support it, even ones up to 300ppi. I don't know if 1w would be enough to power them though, and they're a bit more expensive.
Considering these types of displays don't require active energy input to function, I don't see why you couldn't update any size display with 1W. You'd need to progressively update parts of the display at a time, which likely requires extra engineering effort, but in theory it should work.