When Victor calls Elizabeth "cousin" in the 1831 edition, the word is a term of endearment but not a term to take literally, since they have no blood relation. The term likely carries over, but with an entirely changed meaning, from the 1818 edition where Elizabeth actually is Victor's cousin (the daughter of his father's brother).
It is true, however, that incest was of significant fascination to Shelley. Her novella Mathilda, published posthumously in 1954, concerns the relationship of a woman with her father. After sending the manuscript of Mathilda to William Godwin, he told Shelley he found the depiction of incest "disgusting and detestable," and refused to return the manuscript to his daughter.
See Janet Todd's edition of Mary's novel:Shelley, Mary. Matilda; with Mary and Maria, by Mary Wollstonecraft. Ed. Janet Todd. London: Penguin, 1992, p. xvii.