Judging from the time stamp on your message, you've probably already figured out your answer. However, since I just went through this, I thought I'd go ahead and reply.
Yes, the Frostholm mission is required if you want to continue to move forward in Grizzleheim. It completes the Vigrid storyline and provides a major reveal.
Any yes, it's a dungeon. The entry text puts it at 1 hour 30 minutes. I just solo'd it in 40 minutes. Mind you, I'm probably overpowered for this area. (Death, Level 42, 2000+ HP) But I'd say that 1 1/2 hours is more than plenty.