Step 1: Simplify the phrase "my grandfather's only son" first. Since the grandfather has only one son, and the man is describing his own family line through that son, this only son must be the man's own father.
Step 2: The statement now reduces to "she is the daughter of my father."
Step 3: Test each option against this simplified statement. Mother: a mother is the man's female parent, not a daughter of his father, so this fails. Aunt: an aunt would be the grandfather's own daughter (the father's sister), not the father's daughter, so this fails too. Cousin: a cousin would be the child of the father's sibling, but the woman here is described as the father's own daughter, so this also fails.
Step 4: Sister: the daughter of the man's own father is, by definition, his sister, and this matches the simplified statement exactly.
Correct option: Sister