What was the real meaning behind Sai Baba grinding wheat? I heard it wasn't actually for making food.

You are correct; the act of grinding wheat was not for consumption but was a symbolic and spiritual act to save the village. Chapter 1 reveals that the wheat Baba was grinding was not merely grain but represented a cholera epidemic that was afflicting the area. By grinding the wheat, he was metaphorically grinding the disease itself into dust. His instruction to the women to throw the resulting 'flour' on the village boundary was the final step in driving the epidemic away from the people. As Chapter 1 explains, this act of inconceivable cause and effect demonstrated Baba's unique skill in protecting his devotees, showing that the disease began to recede immediately after the flour was thrown near the stream.