Cocoons works great for inter-connected groups that don't get to see each other very often but want to share more of their lives with each other. Families spread across different households, groups of life-long friends, support circles, and more. Keep in mind that like a group chat, everyone in a Cocoon is in it together and will see each other's shared moments (in their Daily Album) by default.
You can be in as many Cocoons as you'd like, and your nickname, picture, and color can be distinct in each. Messages and photos from one Cocoon can't be shared or forwarded into another.