As to your first question, the 1917 Code of Canon Law prohibited the marriage of all relatives out to and including second cousins, without a dispensation from your bishop. I believe the modem (1983) Code only prohibits the marriage of relatives out to and including first cousins. In the past, the Church's canons sometimes prohibited marriages out to and including fourth cousins.
The fact that both cousins are (or will be) Catholic doesn't change whether or not they can get married. It is the mere fact that they share too close of a familial relationship that prohibits it. In any event, the fact that one seduced the other at such a young age would seem to be an indication that they should not get married.
In addition to the canonical prohibition, I believe most civil laws prohibit the marriage of first cousins.