Concerned about my 7 year old niece.... advice?

sounds like she is probably being bullied at school and its causing her insecurities, if her parents treat her differently from her sister then it will also cause problems at home too. they need to talk to her about how she feels, if they dont get it under control now it will get worse and im sure no parent wants their child to be insecure and having no confidence at such a young age.