OP, you sound like a great aunt! If it helps your niece at all, I am super impressed that she had the confidence and presence of mind to make her response. When I was 16 I didnt date and if someone had said that to me, I would have turned bright red, said nothing and gone off and cried for hours. I dont think her reply was disrespectful at all. Maybe a super strict Miss manners would suggest, “I beg your pardon?” instead but I still think your niece was entirely appropriate.

Also, I asked three dads of 15 and 16 year old girls —all very mellow, easy going guys— and to a one they all found the friend’s question disgusting and would have confronted him.

So sorry, OP. I'm glad she's got you in her life. Even if they won't let her stay with you this summer, she won't forget how you stuck up for her.

OP, is there any way you can have her spend the summer with you after all?

If money is an issue, I will help buy her plane ticket!

Ugh, op. I'm sorry. They sound awful. You think they'd rather have her out of the house and with you this summer in that case. What did you say after she left the room?