In regard to Jace and Isabelle... I think that she was getting over a crush on him at the beginning of CoB. But I think that involvement with her and Sebastian is incredibly intriguing... hmmmm.
As far as her personality, I like her. She's vain, undoubtedly true. But she also cares deeply for her friends and family. She is the embodiment of kick-assedness. And great for feminism in the book, because Jocelyn is unconscious, Mrs. Lightwood is not portrayed as a particularly strong or likeable character, and Clary is fairly useless in a fight (other than her runes, which can only be used on very rare occasions).