I am so living this right now! My sister has a five year old daughter, and another daughter that is not quite 6 weeks old. It's been a time of trial and error, and trying to not let feelings be hurt.
I was just thinking last night that I haven't spent as much time with my new niece as I have my older niece by the same age. But it's because when I do have my younger niece, my older niece is right there at my side asking if SHE can hold her sister. She will play with her, kiss her, and then before I know it, someone has come along and taken my younger niece to cuddle. I have to accept that this is just the dynamic of being a younger niece. Even though I want to give her undivided attention - it isn't likely to happen. And really...that's okay. She isn't getting my undivided attention, but she's being showered with love from her sister. And isn't sisterhood a more important bond to form than auntie-niece?