No, this isn't "just a phase" it may be part of a phase, but this is a sad family system. You are right to care but in our culture, it "isn't your responsibiltiy", as you said. That said, you might get persecuted for trying to intervene. But it would seem to me that there are some gentle ways you could become a part of the process.
Get your niece's e-mail address, and send her notes periodically. You could just send little "i love you" notes. She might laugh at them with her friends, she might think you're wierd, but deep down, it's good to know someone cares enough to tell you they love you. You don't have to go overboard on it, just 2-3 times a week send her a note that says, "how's your day, I'm thinking of you," kind of thing. Maybe she will write back, probably she won't.
but it's a basis from which to start. If she has a cell phone, you culd text her periodically. Kids live by the txt msg these days. Just say "hey, how'a life?" kind of thing. quick chats, but periodic, so she knows that SOMEONE out there is noticing her.
does she live near you ? Could you invite her to come over and visit? I would build the relationship quietly first, then see if there are times she could come to visit.
When you do see her, at family stuff, whatever, find times to talk with her, ask her questions, listen to her. Praise her for things, but be sure the praise is truly honest. Kids know when you're trying to snowball them. I have a 13 yr old and a 15 yr old girls. They sometimes think I'm insane, and they roll their eyes at me and cut off conversation, but they know they are loved, they are very grounded, and they have good relationships with friends and even other adults.
Remember that no matter how involved you get in her life, you are her aunt. Her primary relationship with her dad was cut off by death, and her relationship with her mom is probably short-circuited by her mom's grieving issues which are coming out in self-absorbtion. It's hard to parent well when we are falling apart on the inside, and especially if we are looking to feel good about us by looking in all the wrong places. Even when you look in the "right places" there's a tragic hole in your life that needs to heal.
You will need to remember that you are a secondary relationship. That doesn't mean you can't be a positive element in her life, but in the end she'll need to be able to cope with her mom as well as with her life. Be there for her, but be prepared for Mom to get jealous and turn on you, complain to the family, etc. No matter how much good you do, you may become the family bad guy. It sounds to me as if you would be willing to face that in order to "save a child", and that's a good thing.
With her mom, if you can, compliment the things she does well with her child. Listen to her, make suggestions as questions, "can you tell her how you feel about her?" as opposed to, "well you need to be sure she knows you love her." there's a HUGE difference in tone, in the reception of the idea, and even if she says, "no" when you are talking with her, she will think aboutt the question over and over and she'll find a way to do it.
It sounds to me as if both of them are a bit lost. They both need love and support, and it's a huge job. Trying to show your love is WAY better than turning away because "it isn't your responsibility." KUDOS to you for caring !!!
barb