I have been following your posts about your niece and have not replied as yet because I have not been in your shoes. And I pray I never am. When my BIL died years ago, my niece was 5. My sister had a will made up that if anything happened to her, I would take my niece. She is the closest thing I have to a child. She is 18 now and a fine young woman, so no worries. Her brother however sounds similar to your niece. He is 31 and is back at home, went to college, has degrees and does nothing!!! If anything ever happened to my sister, I don't know what I would do if I got stuck with him.
I will keep you in my thoughts, I hope you can find a solution to dealing with your niece. I don't think you're heartless at all, you're in a difficult situation.