Lliwio would be the verb of colour, so colouring. Colours would be lliwiau. Hope this helps :)
Mae _ yn = _ is Therefore 'Mae Sioned yn ____' = Sioned is
And so 'Mae Sioned yn lliwio' = Sioned is colouring
Hope this helps :)
I suppose you could use 'Mae Sioned yn lliwio' as Sioned colours, but direct translation would be Sioned is colouring.
So from your example above:
Mae Sioned yn lliwio achos mae'n hwyl - Sioned is colouring because it is fun and could also translate as Sioned colours because it is fun.
I'm not fluent by the way, just a very enthusiastic learner, so sorry if my above comments were incorrect (and this one), but this is how I'd say both sentences.