does the I-Phone 5 have an inbuilt GPS
Yes
does it rely on cells to locate your position when that app is turned on?
No. But it the nature of the chipset used means it is capable cell, bluetooth and crowed-sourced WiFi to enhance the accuracy your position.
But I'm pretty sure you can put iPhones and iPads into Airplane mode and force them to just use GPS and nothing else for your location. Of course you would need an offline map for it to be able to actually show you !
If it does have GPS inside, can I use it as a location aid when flying my slow moving puddle jumper?
Depends where you mount it ! Can't see it being much different than using it for satnav in a car.
One more to clear some office discussions - do you incur costs when using the phone in map mode?
If you have an offline map already loaded, no. (assuming your offline map provider doesn't have any online features).
If you have an online map (such as Google Maps, Apple Maps etc.) then you'll need to discuss the matter of charges with your contract provider, as what you do and do not get charged for will depend on what you have signed up for !