How come Graham can survive falling from a tree and being dropped by a bird from high in the air in KQ1, but in KQ5 falling just 2 inches kills him (the first screen of Mordack's Island)?

He's old and brittle by KQ5. He can't take the falls like he used to in his younger youth days

Location, location, location...

It's not necessarily the distance Graham falls, it's about what he falls on or into.

The terrain around Mordack's island is treacherous, with jagged rock everywhere. In KQ1, there are abundant flowers and lush grass to cushion Graham's fall. Let's also not forget that during KQ5's into, Graham fell from a quite a height into a pond, and survived, while arriving at Crispin's house.