My dad and uncle were always in and out of prison when I was younger. So somehow I can relate? My mom never "sugar coated" it. I always knew. She would tell me gently but honestly, that my dad made some bad decisions in life. When my mom would tell me of the bad decisions he made in life, she never left out the good things about my dad. How he loved me and I was daddy's little girl. So just in that, be honest with your LO. But don't forget to also tell LO the good things too.
When my uncle would write to me he would sometimes be upset with me or other family members because, "No one was writing to him". But in my mind and the way that I've explained it to him was that, I didn't put you there. I shouldn't Have to write to you. Mean? Maybe. But when someone loved is incarcerated we and they have to remember its not just them or us that is suffering and hurting this wait. We're locked up with them. We see the faces of our loved ones in the faces of our children's.
Take care. Be Strong!