Here is some food for thought. If Jiraiya was Tobirama's grandson that would make him and Tsunade second cousins. Relations between second cousins is not considered incest in most parts of the world (Japan and the USA included) While the USA does have per state prohibitions against the marriage of first cousins, Japan does not and while not as common as it once was, does permit first cousin marriages. So using the if they are related Jiraiya wouldn't have been hitting on Tsunade because it would be incest argument isn't really a very valid argument at all.
Why do you think all those Hyuugas look so much alike and no one in the Narutoverse thinks a thing of it?