I've done a lot of Indiana research and a made several trips to do research in Indiana. Indiana, as a whole, keeps pretty good records and is very genealogy-friendly.
The Allen County Public Library in Ft. Wayne (not that far from South Bend) is the 2nd largest genealogical library in the United States, second only to the Family History Library in Salt Lake City.
The Indiana State Library in Indianapolis also has extensive genealogy holdings. The website for the Indiana State Library has a terrific "Ask a Librarian" feature.
As far as indexes go, if you are talking about the WPA (Works Progress Administration) Birth, Marriage or Death Indexes, they are reasonably accurate, but not perfect. I'm not sure to what other indexes you might be referring.
I would contact those libraries before I made a trip. I would also suggest you contact the County library and Health Departments of the county of which South Bend is a part. If you are looking for a birth or death record the libraries may have copies of cemetery transcriptions and obituaries. Phone calls and letters can accomplish a lot and are far cheaper than making a trip. If you decide to make a trip to Indianapolis, the people at the State Archives were very helpful to me.
Have you found your grandmother in the orphanage on a census record or tried to find her actual birth record at the county health department, perhaps in a adjacent county?
I was born and adopted in Michigan so I can tell you that if you are trying to trace a child adopted here you will, unfortunately, not succeed. According to Michigan law, all adoption records are forever sealed. Not even the adopted person can get access to them, even when enough time has passed that the people involved are unquestionably deceased.