Taylor in Camelot!

Sun-kissed skies. A family-filled sailboat. A handsome Kennedy and his beautiful companion. The setting could have been Hyannis Port circa 1960, but instead of JFK and Jackie, the carefree couple getting cozy off the Massachusetts coast on July 30 were Robert F. Kennedy’s grandson Conor and singer Taylor Swift. “They were sitting up in the front of the sailboat holding hands,” says an observer. “They were in their own world.”

Could it be that the country-pop princess who writes songs about love and fairy tales has found her Prince Charming in the tousle-haired teen from America’s royal family? “Taylor is swept off her feet,” says a source in her inner circle. “She thinks he is the one right now.”

The pair bonded in Hyannis Port during the Kennedy clan’s Fourth of July celebrations (at the time, bloggers wrongly speculated that Swift, 22, was dating Conor’s cousin Patrick Schwarzenegger, 18). Their romance became quite public on July 25-just a day after Conor’s 18th birthday-with a hand-holding pizza outing in his hometown of Mount Kisco, N.Y. (Conor is the oldest of four children born to Robert F. Kennedy Jr. and Mary Kennedy, who committed suicide May 16.) The couple then headed to Cape Cod, where they were spotted having lunch together, stealing kisses behind a boat shack, hanging out at the Kennedy compound and making late-night runs to Four Seas Ice Cream with Conor’s cousins. (For her: cookie-dough and butter-crunch ice cream. For him: a frappe.) The pair aren’t shy about PDA: As they waited for their treats on July 31, their server Kaiya Davis recalls, “they hugged each other and she gave him a kiss on the lips. They’re really cute together.”

While Swift’s romance with Conor might be new, her infatuation with his famous family is not. Earlier this year Swift met his grandmother Ethel Kennedy, 84, at the Sundance Film Festival, where his aunt Rory’s upcoming HBO documentary about Ethel premiered. Swift-who recently said her style is inspired by Ethel and Jackie Kennedy-said the meeting left her “starstruck.” And Ethel, who rarely speaks to the press, has praised the Grammy winner. “She is amazing,” the family matriarch said at Sundance. “She is such good company.” Added Rory: “I think there’s a mutual-admiration society between my mother and Taylor Swift.”

Same goes for the clan’s younger generation. Conor’s half sister Kathleen “Kick” Kennedy, 24 (her mother is Bobby Jr.’s first wife, Emily Black), recently posted an Instagram shot of Swift and two little girl cousins with butterflies painted on their faces. “I love her,” Kick told the New York Daily News, noting that the singer’s relationship with Conor is “very real.” Perhaps it helps that instead of being a Hollywood star like many of Swift’s exes (she’s dated Joe Jonas, 23, Taylor Lautner, 20, and Jake Gyllenhaal, 31, and was linked to John Mayer, 34), Conor is simply a prep school student who spent part of the summer aboard the Odyssey, a research boat, studying marine pollution. According to sources, he’s close to his family (they’ve helped him cope with severe food allergies) and was adored by his mom. Says a family friend: “She was really proud of him.”

Will this be more than a summer fling? In September Conor returns to school, while Swift will be busy promoting her new fragrance. Still, they may already have a date set for December, when she’ll be honored for her “commitment to social change” by the Robert F. Kennedy Center. And after that? Ethel, for one, wouldn’t mind if Swift stuck around. Asked if the singer would make a good addition to the family, she told PEOPLE, “We should be so lucky!”