Clearly you're misunderstanding. Plot Protection keeps a character from being killed until a certain point. And, btw, if Malgus died on Alderaan then he wouldn't have appeared on Coruscant during the Sacking. Things like this are used to maintain Continuity. However, such is Irrelevant here because this is not a story written within the confines of the SWU. It is a hypothetical scenario falling outside of the Story which prevents such characters from being offed.
For example, Obi-Wan was protected by Plot in Ep1 when fighting Maul. Maul had the upper hand and clearly would've (should've) won and killed Obi-Wan. However, since they needed to preserve continuity, PIS were induced to allow Maul's defeat. That would be Plot Induced Stupidity. Which generally involves making a character act out-of-character. It's what keeps villains from offing heroes and makes them give long-winded monologues instead of just getting the job done. PIS/CIS is a constant tool in fiction for the sake of story development and keeping certain characters around until they are no longer needed.
However, once more, such a thing does not apply here. And Grievous' cowardice is not a special power. Malgus surviving Satele's Force Blast is more evidence of how tough he is, and it was the reason for his respirator.
The key word here being, irrelevant
. While I completely understand your point, not only is it completely hypothetical, its also an argument outside of the Star Wars Universe and therefore not valid. So for the purpose of debate, Grievous is a master escapist. And why can't he be? It has nothing to do with his powers, he just has to be smart enough to know the way to the escape pod, and we all know how quick he can move with those legs. What's more, you said so yourself, Grievous is a coward, well, tha's subject to debate but he certainly chooses flight over fight more often than not. So, say, if Malgus boarded his flagship, he would run for it. Malgus is highly unlikely to win the war purely by storming his way into whatever room Grievous is in, if you think about it, out of all other matchups, a 1v1 fight is least likely to happen.
But anyway, you make some good points. Malgus has a lot of spin balls while Grievous has few (may i also note that ground rules excludes Darth Serevin from this battle), but Grievous has a lot
of droids. No, your right, he doesn't have 'trillions of battle droids'. He's got, and this is a direct quote from Wookiepedia backed up by a source:
a colossal army numbering in the quintillions
So, while Malgus doesn't have to wade his way through every single battle droid. He does have to fight them. So Grievous has Malgus pinned down on the battlefield. But in my opinion, its in space that this battle will be one or lost. According to Mace Windu:
the Separatist navy has four times the number of ships we do
Being the Republic, so Grievous has Malgus heavily outnumbered in terms of ships. But I think we can all agree that Sith battlecruisers are far superior to that of the CIS, so they probably count for 3 of Grievous' ships. Still though he is outnumbered. As JekRendar said, Grievous would win the war of attrition. Malgus' only hope of victory is to destroy Grievous' production facilities, or strike at Grievous himself - but Grievous is incredibly evasive.
It all comes down to how skilled a tactician Malgus is, and whether he can end the war as quickly as possible by cornering the General. Personally I don't think it can be done.