Hello. Just to answer your fundamental question, I think no, you're not being ungrateful, because it's not about that. No doubt you have already expressed your gratitude to her for the job opportunity - so, that's that. This thing with her flirtations is a separate issue. But if it doesn't sit well with you to sever the friendship while working in a job she gave to you, then possibly find a different job - for the sake of your conscience - before proceeding.