REVISED to add a photo of a woodshed (below).
Shirley asked, "Why was the family obligated to Flora?"
I think this was a family thing, in spite of the implied debt to Flora's father. A hundred years ago, more or less (I don't know the exact date), my mother's family took in mother's cousin Ruby. The parents had died, and Ruby went to live with my mother's family, while her brother went to live with another relative. I don't know how old the children were when their parents died, but family took in the orphans. I think this was just something families did back then. Now, it would probably have to be something more formal, more legal. I know one of my daughters and her husband put a list in their will stating who should raise their children if anything happened to them, starting with her twin sister. If she were unable to do it, for whatever reason, then the next person was named ... and so on.
Shirley's other question: "What was the nasty thing seen in the outhouse?"
I have now finished the book and can say, you didn't miss the answer because it wasn't there! I think this was Aunt Ada Doom's litany because she needed an excuse to feign her need to keep the family around herself. Nasty? Maybe she simply saw someone else using the outhouse, or maybe anything else you can imagine. I don't think it mattered to the author, only to Aunt Ada Doom. I got the idea that no one else in the story knew the answer to this question, either ... lol.
REVISED to add this photo:
Shirley: "Now that I think about it, maybe the nasty thing was in the woodshed instead of the outhouse."
Bonnie: "Yep, it was the woodshed, and I should have caught that ... sorry, I wasn't thinking, either. Okay, here's a photo of a woodshed. If you click on it and enlarge it, you'll see that the sign above the door says COAL SHED ... even though there is wood inside. Both wood and coal were ways of heating the house, once upon a time. The woodshed was once known as the place misbehaving children were taken to be disciplined by spanking. So maybe THAT was what Aunt Ada Doom saw. Maybe she thought spanking a child was a nasty thing to do to the poor kid."