Seeing as though I've never actually ran into this situation, I wouldn't trust my advice completely. But I'll try to help.
Basically what I would do, I would ask her permission if you really want to date him. That way she knows you're not just trying to her off. Since he's family she probably just doesn't want him to get hurt. And as for the telling of who you like, I'm not really sure. My friends have done that too and I know I would never do that. So maybe confront her? Tell her you don't want her to tell anyone about who you like?
Don't think like that! I once liked my bestfriends twin. He is sooooooooooo out of my league. And it turned out he liked me at one point. So yeah. You never know what's going on in guys' minds.
seriously..
Basically what I would do, I would ask her permission if you really want to date him. That way she knows you're not just trying to her off. Since he's family she probably just doesn't want him to get hurt. And as for the telling of who you like, I'm not really sure. My friends have done that too and I know I would never do that. So maybe confront her? Tell her you don't want her to tell anyone about who you like?