Isn't it amazing how marriages bring so much happiness, but weddings tend to bring so much stress, chaos, and family strife?! Ugh.
It was a little difficult to follow all of the characters in your story, but I believe that I accurately understand, and here are my thoughts take them with a grain of salt. Moreover, just for a little background history on myself, I have had 2 of my own weddings.
My first was such a beautiful day, but not without some family drama. The man that I was marrying was of another race/ethnicity, and his parents hated me for it. They refused to throw us a Rehearsal Dinner, even though my parents were paying for a $50K wedding. Tacky. But we simply held a small ceremony rehearsal (including them), followed by a VERY secret party afterwards with my friends and out-of-town family. BUT I DIGRESS!
In my opinion,
(1) Your niece's boyfriend's sister is not wrong for not including your niece in the wedding party. It does not sound like she is coming from a place of "exclusion". From what you describe, it sounds like she has chosen her girlfriends and blood relatives, and your niece is SIMPLY not one of these. No one ever said that wedding parties were made by matching up people with their bf/gfs/fiancés, etc. This is her day, and this choice does not make her selfish it makes her a bride, simply thinking about wanting to have the people closest to her in her life at her side when she marries just as your niece will want.
(2) Perhaps someone could tell your niece's boyfriend's sister how your niece is feeling, and (absolutely NOT recommend that she make her a bridesmaid), but perhaps ask if there is any room for her to be included in the bridal party as a Greeter, or to assist the Wedding Planner, etc? And that would allow her to be included in wedding party activities! (If your niece is not interested in doing any duties besides bridesmaid, then that brings me to #3.)
OR, perhaps this other bride could be made aware of your niece's feelings, and could, instead, write a lovely, quick little card about how she's sorry that she could not include her in the Bridal Party, but how she likes her very much, and is so happy that her brother found such a wonderful woman to marry! (Just a thought...)
(3) Finally, possibly, it's sounds like your niece may be the one who is maybe acting a little immature here? Is she willing and truly WANTING to do any wedding-day duties for the bride, besides being a bridesmaid? Bridesmaids work hard for the bride that day (and I can say this, having being a MOH 4 times, and bridesmaid 5 times), because they are her very best friends in this world, and the bride needs girls to run to the bank because she forgot tips for the vendors, to simmer down the fight brewing between Aunt Margie and Grandma Bessie, to figure out how to stop the bride from having a meltdown over her hairstyle, to hold the bride's dress up when she is in the restroom... and only bestfriends should be the ones doing this. It has absolutely nothing to do with which groomsmen matches up with which bridesmaid when walking down the aisle. And your niece should try to quietly sit, close her eyes, relax, and put herself in those shoes.
Again, I only heard a small part of your story, so I may have things wrong. I tried to give the best I could with the info I could pull out of your story. I wish nothing but the absolute best to both of these women, along with peace, playfulness, bliss, and blessings for their upcoming nuptials! I look forward to hearing what others have to recommend, and what you have to report!