Exactly as you say, especially with the dead mother as well. Does not take away that if Cheeky had decided differently Monica could have easily been his Aunt as things played out in this game until now, that might change ofc game is not ended yet and things may happen that make that more impossible or improbable as well or twisted in a way as Monica is somewhat related to the dad for example his niece. Remember we know little about how Mom and Monica met and became friends, maybe on purpose.
Cheeky chose to give them a relation from past though where they feel like they are family, but without that blood bond. Chosen family instead of one you were saddled up with.
The Dad's niece would NOT have worked. Maybe a younger sister's BFF or a cousin could. (still Creepy).
We KNOW that Elaine and MC's father were together for 20+ yrs.
(IF Elaine was say 25 when they met and "Dad" was early to mid 40's; Now, Elaine 45+; Dad could be late 60's to mid 70's)
What we do not know is the age difference between Monica or MC Mom to the Father before Elaine.
Game COULD have 'worked' Better In Original play, or as Incest Mod IF Monica Was MC's Aunt instead of 'Family Friend'.
- Jenna and Katie would be MC's cousin. (would Still be frowned upon)
Being the MC's Mom's sister(*) would Not REALLY change much.
- "Aunt" could have still influenced the Mom to leave the Father.
- the Father could still have tried to seduce/have affair with "Aunt"; and was turned down.
(the Original reason for separation/divorce vs. Dad caught cheating w/ 'Assistant'; which Could work in either version as well)
- the "Aunt" would still have a Lil bit More influence (in court) as she Is Related to deceased Mom vs. being a "Friend".
* BUT WE All Know how Patreon & 'Paypal' views Incest as a Big "No-no"! (I won't Go into at this time).
This IS More about Story Continuity than anything else.