1. I have much salad.
2. I have a lot of salad.
Is sentence also grammatical?
What can I say to my students if they are wondering about sentence 1?
Well it's simply not correct. You use "much" in negative and question sentences.
How much do you have?
Do you have much butter?
I haven't got much left.
The only positive sentence I can think of where it's used is "we have much to do," which is very old-fashioned.
The positive statement I always give as the "exception" is "I have much to say" because I still say that but only in very specific contexts and usually in terms of "Yes, actually, I have much to say on the subject but I will save it for a more appropriate time".
Remember - if you don't use correct capitalisation, punctuation and spacing, anything you write will be incorrect.