Well.. they're 21. If I were her, I'd be like 'okay, fine, I'm not your top priority, BYE!!'... but I also understand that feelings are different for other people.
I still think she needs to come up with some guidelines and priorities. If he isn't willing to compromise, he does NOT deserve her.
When I met my husband, he had a female best friend, whom I loved and immediately became friends with. HOWEVER, it quickly became apparent that while she was in a (sh!tty) relationship with someone else, she was very jealous of my husband being in a happy relationship, and treated him like a 'girlfriend', not a guy friend. Wanted him to go out and play wing man, stuff like that.... which would have required my husband hanging out with a bunch of other single ladies and staying out late.
Lucky for me, my husband knew what his priorities were. He cut her off and out of his life; she just wasn't worth the hassle. If your nieces boyfriend was serious about her, he'd do the same thing.
I think, at 21, you don't know what or who you want, you barely know yourself. Again, if it were me personally, I'd tell him to take a hike and stick it where the sun don't shine!! It kind of sounds like she lacks the confidence to do that. If he doesn't have the balls to stand up for HIMSELF, then he's not man enough for HER.
I hope whatever happens, works out in her favor!! :)