After a few hours of digging, I narrowed down the culprit causing my problem: The character Â.
If I eliminated that character from the database entries as part of the SQL query using the SQL REPLACE() function, Then the export works just fine.
The problem with the file failing to open in EXCEL, however, would happen even on a small, 200-row SQL result, if that character was present.
It’s more an EXCEL problem, not a PHPGrid problem. There is nothing wrong with the XML file other than that character. That character was occurring as a result of an incorrect character encoding somewhere between our cloud software and the database it’s dumping to.