Plasmonic hydrogen gas sensors have become widely used in recent years due to their low cost, reliability, safety, and measurement accuracy. In this paper, we designed, optimized, and fabricated a palladium (Pd)-coated nano-grating-based plasmonic hydrogen gas sensor; and investigated using the finite-difference time-domain method and experimental spectral reflectance measurements, the calibrated effects of hydrogen gas exposure on the mechano-optical properties of the Pd sensing layer. The nanostructures were fabricated using DC sputter deposition onto a one-dimensional nano-grating optimized with a thin-film gold buffer to extend the optical response dynamic range and performance stability; the color change sensitivity of the Pd surface layer was demonstrated for hydrogen gas concentrations as low as 0.5 vol.%, up to 4 vol.%, based on the resonance wavelength shift within the visible band corresponding to the reversible phase transformation. Visual color change detection of even the smallest hydrogen concentrations indicated the high sensitivity of the gas sensor. Our technique has potential for application to high-accuracy portable plasmonic sensors compatible with biochemical sensing with smartphones.