Is it ok?
Is it still ok, even though she knows how I feel about it?
Am I being a paranoid?
It is NOT okay for your wife to behave as she is, whether she knows about it or not. It's never okay for a person to betray their spouse, and engage in independent behavior (read everything you can here - for definitions and basic philosophies).
You are NOT paranoid - your gut is telling you that your wife is having an affair. And your gut is RIGHT.
You will get some great advice and direction from folks on the Surviving an Affair board -- please hit the MODIFY button and request that the moderators move this thread to that board.
Meanwhile, order a copy of Surviving An Affair. Read some threads on that board. Make sure you are very familiar with the basic concepts here.
Be encouraged. Your wife's lover is half a world away and doesn't appear to be that interested (although you never know as people lie like rugs when they are involved in extramarital relationships). There is a very specific but effective path to destroying this relationship and restoring your marriage to a state you never dreamed possible. Many people recover from adultery to find a much better marriage -- in fact, it's required in order to minimize the potential to slip back into old patterns.
And don't bother with your previous relationships/GF's -- there's nothing okay about that and it won't solve your problems at all.
I advise you don't bother trying to sell all this to your wife until you have a good grasp on the ideas and have a had a chance to absorb what's going on. Just let her know you do not accept her behavior; it is hurtful and you will do everything you can to stop her from carrying on a relationship with another man - and it ABSOLUTELY IS your business as it directly affects every single thought in your waking and sleeping moments. Call your cousin and tell him to kindly change his number, stop returning calls and texts, and that you will be protecting your marriage to the death, any further communication on his part will not be tolerated.
Read up on "exposure" - your going to need it. The idea is to enlist friends and family (yes including your kids parents, aunts uncles inlaws etc) to destroy the affair; you can't do it alone and you need their help in saving your marriage. If they care about you and love you and your ww, they will talk to her and try to use their influence to stop behaving in such a way as to destroy her entire life, and that of her kids and husband.