There could be some Issues going on with her but it is your parents that are permitting this behavior they should tell her she cannot sleep with them and stick to it, how do the rest of you get on with her are you all friends, does she get picked on by anyone is school okay.
Hi, Flygirl!
Well, it looks like you get to experience some early parenting lessons! Unless your sister has an emotional issue or has had a recent trauma, which we'll assume she hasn't, basically she just needs a firmer hand. She probably is seeking the attention and nurturing that she's getting from mum and dad when she's naughty. See, if mum and dad give in, even once in a while, she'll continue to drive you all bonkers. She's actually being quite smart, she's figured out that whatever the punishment is, it's worth the end result of snuggling and feeling safe, not to mention, getting her way.
The best solution is to ignore her completely while she's having her outbursts and ask mum and dad to be firm with her. Ultimately, the responsibilty is theirs to parent her and you should probably stay out of it as much as you can.
Good luck! And hopefully, good night!