I'm not sure if this advice is good or bad, but here is how I would handle it...

If she does have NPD, which it seems that she has it to some extent, then I'm not sure how confronting her will help unless it is done on an individual basis. I feel like maybe, since she is not a part of the "immediate family", she might feel very threatened by the whole group approaching her with concerns about her behavior. The reason she acts that way to begin with stem from feelings of inadequacy and rejection, so she might interpret an intervention as confirmation that she is inadequate and that no one likes her.

So, instead, maybe try to speak to her one-on-one, and begin the conversation on a positive note, listing the qualities that you like and admire in her. I usually try to level with the person by admitting some of my own faults, followed by things the other person does well that I have have a hard time with, and then gently start talking about MY feelings about their behavior. This opens a line of dialogue, making the situation more about how I feel about their behavior, rather than coming at it from an angle of "you should really fix this". A person with this disorder is very sensative, so I would be very careful with my words to try and make sure that I don't come off as being "better" than they are in some way. Maybe if you are able to make it a personal conversation between two friends who love and trust each other, she will be much more cooperative and responsive.

Again, this may not be the best way to handle it, but based on the information you gave, it is how I would go about it. I hope it helps! Good luck, and I hope you are able to find a solution that works for everyone!