One of the great things about extended families is that you only have to see them on special occassions (holidays, weddings, and funerals). So don't look at her extended family with great importance. You mentioned that her parents are okay.. those are the only ones (other than herself) that should even remotely enter into the equation.

Dating a friend can be a bit risky... the possibility of losing a dear friendship is all too real. HOWEVER, if you two are truly that close, that isn't going to be very likely. Worse case scenerio.. you give it a shot... she doesn't feel the same way or it doesn't work out.. then for sometime there might be an awkward stage but if you two are really that close... it will be overcome. Best case scenerio... well.... it could be a beginning of a wonderful life changing thing..

I believe that love is worth the risk... when you are in love and that love is returned... there is no feeling like it... go for it... share yourself with her... you might be surprised when you discover that she returns the feelings