This is not end to end encryption. There is nothing stopping you (or Hetzner) from accessing your family’s data, as one the disks are mounted to a host they are decrypted and available for use.
True E2EE would be that all data on those disks is encrypted by the client your family uses, so even if you combed through the disk volume you would only see cipher text
True E2EE would be that all data on those disks is encrypted by the client your family uses, so even if you combed through the disk volume you would only see cipher text