I do not believe it is Downs. It doesn't look like Downs, and nor is the fashion of the audience appropriate for the age of the performer - if it had been Downs. Spot on, however, about the audience being the grandparents of the L & L crowd.
My first impression is also that it's not T. Nelson Downs. The face is much too thin and the head too long. However, I noted that the film appears to be squashed (side to side) because the audience members in the final shot also look to have elongated heads.
Even so, taking that into account, it still doesn't look like Downs.