You don't have to confront her, you need to show your girlfriend's sister you aren't an invader and/or a threat.
Let's start with the "When visiting my girlfriend's family". This is an important point.
Your girlfriend and her sister are in their safe family zone, in which you have been trusted enough to be invited. Even more, your question suggests that physical closeness with your girlfriend in her family presence is totally acceptable.
You have to consider that each individual of this family has a point of view on you and your behaviour, and will act accordingly.
This means that your girlfriend's sister could see your actions during these family events as partly intrusive, and her behaviour could be translated like the following:
- I am here too, please don't forget my existence
- I feel like I need to defend closeness to my sister
This also means, other members (possibly parents) of your girlfriend's family could have a link to this situation, either directly or not.
As a family outsider, you have very little to none possibilities to counterweight these influence efficiently.
However, your relation to your girlfriend's sister is very likely the key here.
Improving this relation, will be rewarding and showing of your care towards your girlfriend and her family.
- Without girlfriend's influence :
1- Try to know who she is, and what she likes. Speak to her of unrelated subject and show interest in her person, this will reduce the possible tense between the both of you and start a link. If this is already the case, maintain and improve that link.
This will improve the image she has of you, and could destroy the possible "competition" here.
2- Give her space to cuddle. Make sure she understand you will never be in the way if she wants to feel close to her sister.
In these family events, your girlfriend's sister should be able to cuddle her sister if both of them want it. Let them decide what kind of behaviour they enjoy in this new configuration. Your girlfriend will send you hints on how and when she would like you interact with her, or with her sister. In this way you possibly get her to help you without asking.
3- Take the time to discuss about this with her sister (risky in my opinion).
EDIT Why its risky: Confront her directly makes this situation real, and is likely to create conflicts. On the other hand, if you try to deal with it by showing a different attitude, you can make this problem disappear and create a healthy relation with her sister in the meantime.
Find a good moment to have this discussion when you can have a quick discussion during a few minutes without being interrupted.
I can see you and 'GF' are pretty close, that's really nice! She's
lucky to have you.
Imply the fact that you are okay with this, and you want her and your girlfriend happiness. She'll also know you recognize her positive impact.
Then slightly indicate that you want to find your place
I enjoy those moments with your family, I hope you don't mind if we cuddle sometime..
The trick is to state that you want to be on her side, without showing as a threat. You're here. But you're not imposing yourself.
There are no safe way of doing it : you will expose yourself. So pick the best/positive side: your girlfriend/her sister.
You could add a family or personnal story of your own to help her empathize with your situation.
- With girlfriend's influence :
4 - Tell your girlfriend you think this is something about this and ask her how you should do it. The fact that you ask, will probably give you at least hints, or even make her act on it in a way she decides.
5 - ask your girlfriend about her sister. Try to know her, show interest in her. Ask her to organize a meeting with the three of you. It would be even better with her boyfriend and/or friends. Be very specific on the interest you have in her, you just want to know her better and nothing more. This behaviour might create tension between all people involved.
I use to spend a lot of time at my girlfriends family house during the summer.
She had both a little brother and sister. The age gap may be a difference here, but I had a very similar issue with her little sister.
I applied both first solutions and it worked really well. I actually had a really enjoyable relation with the little sister afterwards as we both started to like each other.
Don't underestimate your body language. Cuddle your girlfriend in front of her family is not totally harmless. It can imply a lot to her family and feel particular to some of them.
keep in mind this might be some sort of group response, and not only the fact that her sister just want to cuddle.