Sadly nobody knows, neither his true identity or why Luffy had a freaked out expression. Yet another mystery Oda will torture us with for a long while, I bet.
However, there is a popular theory that Gold Roger may be his grandfather. The basis being the "Will of D" and Roger's true name being Gol D. Roger, and the way the timing went. When Roger was executed we're guessing he was somewhere in his late thirties early forties, which is just old enough to have a kid and to let that kid grow old enough to have kids of his/her own. Since he was executed 22 years ago that excludes him from being their father (Ace is 20), but if he is the age we think he his he very well could have been there grandfather.
All speculation, however. That's all the hints Oda has given us.