Well...whether or not you decide to say something to the boss's boss depends on various factors. Depending on the office culture, the personality of the boss's boss, or the relationship s/he has with the underling, whistleblowing could go one of two ways: 1) Positive outcome---the underling is disciplined (maybe even fired) while you experience no negative effects or; 2) You could be the one fired or if not fired, your worklife could end up being a living hell.
In all my working years, I've had 2 bosses that I would give the title of "the boss from hell". Here's what happened when I worked for the most recent one. The department I worked for was opening a new branch. I decided to see if I could transfer to the new branch because doing so would give me enough hours to get benefits. I got the job but unfortunately, those of us who worked in the old branch and made the transfer were tarred by the same brush. The boss at the old branch was seen as an ineffective manager who let incompetent workers get away with doing little or nothing. So it was assumed that anyone who worked for this boss was not a good worker. Well...boss from hell decided that I was the senior employee for the particular job I did since all those hired for this job had no prior experience doing this job. Never mind that there was no official title identifying someone as "senior", she just decided to call me that. She expected me to "mother" the other employees.
We had one newcomer who was a high school kid. I was working along side him showing how to properly do the job. He seemed to have trouble grasping it. So I went to boss from hell and told her. I also asked if she had suggestions for helping teach him better. She got exasperated and told me not to complain about him because earlier in the day, they got him to throw out some trash--and that wasn't part of his job description.
Fast forward a few months later---high school kid was told to help out in a specific area. He took that to mean that he got to stand around and talk to the other workers in that department and not do anything else. The other workers that I was supposed to be "mothering" noticed this as well and came to me with their concerns. So...I went to boss from hell and carefully worded what I said. I told her that it "appeared" he was doing nothing but chatting and said that perhaps he was doing other work that I was not aware of. I also told her that if she preferred that I not tell her when I noticed such things, then to please let me know. She only said she would talk to him. She apparently did because he started doing more work again.
Well...it came time for my semi-annual review. I was shocked to see that she had written on my review "is too quick to criticize co-workers"! In all that time, I only told her two things about the high school kid--and nothing about the other workers. For this, I was given a subpar review.
The point is---compared to what you want to report, the things I reported looked trivial by comparison and I paid dearly for it. Think twice---do you want to risk your job? Do you want to have to worry about getting a bad review and having that follow you around when you apply for other jobs? Is it really worth it? From what you've written, what's going on at work seems to be between two adults and has no bearing on the work you do. Are you 100% sure the situation is as you see it? If it isn't and you report it, that could backfire severely.