LW1 - while I'm a very independent person and I don't like social rules, I do recognize there are times to be appropriate and times where I don't care.  When it impacts others, meaning, if someone invited me somewhere and mentioned a dress code, well, I adhere to the code on behalf of the person who invited me.  But, if you come to my house or my events or I invite you to my party?  My rules friend, my rules and if you don't like them, here's the door.  But that door swings both ways and that's the part people forget.  It's not a always about you!

LW2 - the only power your sister has over you is the power you give her.  As mentioned, should could be wearing the hope diamond and all you need do is give her a hug and say "very nice" and move on.  Period.  Wash rinse repeat with each and every display of one-up-ness and pay it no more attention than it deserves.  Keep phrases like "that's awesome", "wonderful" etc on the tip of your tongue with a genuine smile and a quick hug.  Cheers!