This is a really interesting question–I never thought about how what you think is ok depends so much on regional culture and an individual family’s dynamics, even within typical modern American culture, let alone other cultures in the past or around the world.
Incest produces such a visceral “ick” factor for me that I never really thought about what someone who had been raised far away from their 2nd cousins would think. Personally, I come from an area that’s actually pretty stereotypical for icky-incest-stories (half my childhood in eastern Kentucky) and I think that the fact that the region has that stereotype caused a bit of a backlash. It’s an area that’s got a very small population that’s been sitting there for hundreds of years with very little change, and it’s got a reputation (sometimes deserved) as being backwards and dirty, and I think recent generations have been gradually changing their standards based on that. As far as I know, there are people still marrying first cousins, and there’s this family story about one of my grandfather’s crazy cousins who married one first cousin, then divorced him and married another one. People who marry 1st, 2nd, or 3rd cousins are looked down on.
There’s also the fact that everyone knows everyone, and being raised playing with 1st and 2nd cousins is the norm. Even more extended family tend to come back fairly regularly to visit, and families stay close-knit. So you think of your 3rd cousin John as family, and not this new guy you just met. The visceral reaction for me has become: If your mutual ancestor can be easily traced through living memory, eww. With such a close knit community, it’s pretty easy to get to talking to Grandma and her friends and realize that cute boy in your English class is really your 4th cousin through some crazy relative. Puts a damper on things. I joke I had to move to out of the state to find someone it didn’t creep me out to date.
As far as my relationships, even if it’s really distant, knowing how someone is related just kills any romantic thoughts, for me. And of course, we’re all related somehow, so I guess being able to actually trace the path, and people remembering who the mutual ancestor was is what gets me. It’s kinda silly and arbitrary, I know.
So of course things like parent/child, grandparent/grandchild, aunt/nephew would be too close for me. I also do have to admit I’d probably be a little grossed out if I found out that a couple I knew were 1st or 2nd cousins. I wouldn’t say anything to them, of course, and I’d try to think about it rationally, knowing that there’s really no reason for it, but the first gut reaction is a prejudice I’d have to work past.