With certain succession laws, you can even give daughters land, themselves. Marrying them matrilineally to ideal future dukes, then giving the husbands land, is the next-best thing, as long as she produces an heir. You’ll get an extremely loyal ally for one generation, and then a grandson or first cousin with good traits in the second generation. And even if they do overthrow you, it’ll still be your dynasty.
There’s really only one serious drawback for me. Your vassals are going to look for alliances with their neighbors. So, what happens when all the nobles are close relatives? Realistic, but I admit it still bothers me.
They will intermarry, yes. But you shouldn't always consider it incest. If you have hundreds or thousands of family members the number of common ancestors two people share can be pretty small.