How do grenades work in combat? Couldn't quite understand how the book states it.

I've also got 5 PC's in the party. For you GMs out there, how many enemies do you usually throw out against your team of PCs per encounter?

Range(L) check to hit the target. Inflicts damage just like a weapon shot. On a hit 2 advantages and you trip the Blast effect. Even on a miss, 3 uncancelled advantages and you trip the Blast effect. If the targets are in an enclosed space with no real way to avoid a Blast, GM can just hand wave and say Blast effect is automatic.

Depends entirely on the make up the PCs in the team.

also keep in mind:

on a successful hit the original target suffers full damage from weapon plus the usual uncanceled successes, everyone engaged with (or in the same confined space such as a small room) the original target suffers the blast rating if activated with 2 advantage. the original target does not suffer the blast damage as well

So with a successful hit from a Frag Grenade where blast is activated for 2 advantage:

The Original Target receives 8+Sucsess damage (Not 8+6+Success) minus soak

Anyone Engaged (or in the same confined space) receives 6 damage minus soak

With a failed hit, but where blast has been activated with 3 advantage:

the original target and all engaged with the original target (or in the same confined space) receive 6 damage minus soak

I've also got 5 PC's in the party. For you GMs out there, how many enemies do you usually throw out against your team of PCs per encounter?

I usually have one minion group / rival / or nemesis per character depending upon their level of combat adroitness. When we had an astromech droid I didn't give him an opponent. You can base the numbers of minions on the skills of the character. Otherwise try and balance the difficulty of the rival to the skills and abilities of the character.

I've also got 5 PC's in the party. For you GMs out there, how many enemies do you usually throw out against your team of PCs per encounter?

As others have said it depends on the party. A bunch of Politicos, Gamblers, and Mechanics will have different abilities compared to a bunch of Assassins, Commandos, and Mercs.

That said, for gameplay reasons it's usually a good idea to cap it around the number of players, so in your case 5. That way you don't end up spending most of the game rolling for the NPCs. Grouped minions (minions can be grouped, but don't have to be) of course count as a single character since they only use up one initiative slot.