Can "velho demais" also work in this sentence?
That was my answer, too.
Not only should it work, but it is the most familiar way to say this for me. Then again, I'm coming from a European Portuguese background...in which we would also say "A minha irmã..."
Brasilians also commonly say this, at least my family does it this way.
Would "tão velho" work too?
Could you use the subjunctive here? ie seja in stead of e?
No because it is a true statement. It is not used to show wish, desire or assumption.
Can the sentence be written using muito?
"muito velho" should be accepted also.