Yes, you can add it to any Amazon account you want but it won't extend what you already have only replace it.  He's just adding you on HIS account (or someone's account he has) as a "family member."  When you have Prime you can add 4 family members at no charge.  All they get is the free 2 day shipping and no other prime features.  If he sells 4 family members at $25 each his $99 PRIME with all the features is free.  

Nothing wrong with doing that as long as you know the limitations.  You just need to make sure the seller doesn't disappear, drop you off his PRIME then go and resell it again elsewhere but from his "trust" he seems quite safe.