The LW needs to make peace with who she is. She needs to figure out what makes her happy and pursue that. If she is for example, a cardiologist, and wants to have a nice practice nearby her house, that she finds satisfying and rewarding etc., she should determine that and pursue that. If her sister wants to be cardiologist of the year, and chairman of the cardiology department at Johns Hopkins, that's what works for her. There will always be someone better, smarter, prettier, richer, more "succesful" however you define that, etc. If you know what it is that you want, that other people have other things won't bother you.
I don't think saying something to the younger sister is out of order. It might be helpful for the younger sister to become clued in to a pattern of thought that might be driving her choices.