I kinda like hooking up with my friend
Does it make any difference to you whether she's your friend or not?
I'm starting to like her more than I'd like a friend of mine
If you are starting to like her more you should be honest and share those feelings with her. If you don't open up to her you might regret it.
Scared to do that. Might destroy our friendship.
That is a risk, yes, but these hidden feelings will just grow and grow. Better to face them now instead of feeling regret in the future.