More Capulet-ish, Really

I have been waiting a long time to have conversations about the text with my daughter, and I couldn't be more excited now that it's happening. Every day she brings me a question that makes me say, "I don't know, I'll research it."

Today's question?

Rosaline is a Capulet, isn't she? She's invited to the party, and on the list she is referenced as "my fair niece".

So why, then, is it ok for Romeo to be head over heels madly in love with her, but when he finds out that Juliet is a Capulet, he says, "My life is my foe's debt"?

The best answer that I could give my daughter - who was the messenger for other kids in her class - was that we're talking about really extended families here, and "cousin" or "niece" didn't necessarily mean like we mean it, you are the child of my mother's brother or something.  Instead it meant something more along the lines of "kinsmen," as in, "We are related by some combination, but you are not my child or my sibling. Therefore if you are of my generation I will call you cousin, if you are younger than me I will call you niece or nephew."  By extension, Romeo's problem with Juliet isn't so much that she's a Capulet at all, but that she's the daughter of the head of the family (just like he is son of the head of the Montague family).

Which then led to the question (man, sometimes these kids are quick!), "Then what the heck is Tybalt?  He's a cousin, right?  Why is Rosaline no big deal, but Tybalt is right in the middle of everything?"

Good question!  My best answer was that he was very close to the Lord and Lady Capulet, and grew up with Juliet, almost as if they were brother and sister.  Which is later explained after Tybalt's death, so I think that there's some textual evidence to back that up.

How'd I do?  Is there an easier or more accurate way to explain that?