As it's your sister, don't bother with the Lending, just swap account info, log your kindles into each other's accounts and DL the books. Many people have been doing this for years.
Personally I just have everyone on my account (9 Kindles/Kindle-able devices.)
You're right, that's probably the easiest/best option for my sister and I. But I've got a couple other friends whom I don't feel comfortable doing that with that might want to swap books with me. - It would be great if Amazon would create an online feature that allows you to give friends access/permission to view a list of your books. Would also like to have the option to make a particular book on your list "private" in case you don't want some people to know that you are reading it for whatever reason.
Anyways.. thanks for the response!!