Let's try this again, since it disappeared the first time:
I generally define PCs as characters played by a person for the purpose of telling the character's own story (hopefully) as part of the larger story on the game. I generally define Staff-run NPCs as characters played by a person for the purpose of adding to the larger story of the game rather than to tell their own character's story.
I strongly believe that Staff-played PCs should be able to get involved in whatever relationship they want, so long as those relationships do not come with OOC favoritism (as has been mentioned by others above, recusing yourself from a situation where your biases might change your ruling). Sure, Staffers have to be careful due to the inherent power imbalances between Staffer and Player, but they should still get to experience the game like any other player too.
I also strongly believe that Staff-played NPCs shouldn't be TSing unless how that TS plays out is going to have a noticeable impact on the game's story (I would assume that most TS wouldn't, but I don't want to assume that none would). I don't have a problem if a PC wants to seduce the town's NPC sheriff, but unless the -how- is important, I believe that it should be FTBed, so that Staff NPC time/focus can be spent on furthering the game's plot (note, I believe they can still do whatever the heck they want with their time on their PCs). I feel that even if the TS doesn't impact a Staffer's decision-making, a) it's a lot of time and effort that could be spent furthering the game's storyline, and b) there's going to be the perception of bias even if there's no bias.