How to update only a portion of the PuTTY serial display

As mkwired said, the ANSI/VT100 escape sequences are the general way to arbitrarily position text on a display. Historically, the display was a hardware serial terminal like the DEC VT100 and Wyse 50. These days, it is typically a software terminal emulator such as HyperTerminal, Tera Term, Terminal.app, xterm, Gnome Terminal and so on.

If you want to use the ANSI escape sequences with a GLCD, you will need to select one that supports them. Most out there have their own interface for controlling the display. Here is one manufacturer I found with a quick websearch (no endorsement): http://www.acscontrol.com/Pages/Products/Lcd/index.htm

Here's an Arduino library that can control KS0108-based GLCDs natively, without the ANSI escape sequences: Arduino Playground - GLCDks0108

You will have a wider range of GLCDS to choose from if you don't go the ANSI-compatible route, but I don't know how you will be able to do your development using just your host machine and then add the GLCD later without using ANSI escapes.

Homebrew automation sounds like a fun project! Good luck!