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Ok. First, the friend's with cousin issue. He introduced you two, right? Is he ok with it? Personally, if it were me, I wouldn't have any problem at all with a friend dating my cousin (I only have one female cousin, and she's *hawt*.) So, that side of thing is in the air. Talk to him.
Second. Her. She's sounds somewhere between 'flighty' and 'absolutely nuts'. Sounds like bad news relationship-wise to me. But, that's your call.
Third. There's lots of kind of relationships. Let this one define itself. There's nothing wrong with 'just friends' - in fact, 'just friends' is a horrible phrase. Be friends, if that's what you want. Take it further, if that's what happens (but be careful - see point #1). Don't stress it too much.
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