It does sound like the bride is excluding his family for some reason. Has anyone hurt her in the past? Has anyone said anything about her starting to have kids at 16yo w/ different men, and it got back to her??? That's my guess.
As far as the neices/nephews and her kids... they are all considered the *children* in a family, no matter their real age. A sibling is considered a pier (is that the right spelling?) of the bride and groom, so is on a different level than the *children* of the family, no matter the actual age of the siblings. So it sounds like the bride is having all the attendants be *children* for whatever reason. Is the bride an only child? If she is, she may be jealous of the groom/sister relationship, or she may not understand the relationship, or she may not care. Or she may think if it were a brother, it would be a different story and the groom would have him in the wedding party, but since it's a sister and not her sister, it's not a big deal. And if she's not an only child, she's also not including her own siblings, right?
The sister should keep quiet - I don't think expressing her feelings at this point is going to make anything better, and will probably only make it worse. It will make her seem very immature - the bride will probably think "i already have 4 kids... I don't need another *kid* in my family. this is a sister, not a child"... and the bride will once again be questioned on her choices... and if I were the sister, I wouldn't want to be in the wedding party because the bride felt forced to have me. no thanks.
after the wedding, the sister can try to slowly develop a relationship w/ the bride if she wants. she can also keep her relationship w/ her brother if it doesn't work out w/ the bride. she can call bro on his cell phone occasionally to say HI. She can meet him at his work for lunch occasionally. Of course it's better to have a relationship w/ both of them, but if it turns out this bride is an evil person and looking to separate her groom from his family, the sis does have a few options.