Translation:What grade is your older sister in?
I suppose technically the meaning is translated correctly, but word order does have an effect in English. In this case, putting the question in normal sentence word order might suggest something like, "Your older sister is in what grade!?" or as if "what" is being used as a placeholder to indicate that the information of what grade she is in is both unknown and unimportant.
remembering the otherwise-unnatural direct transliterations of some of these sentences helps me, and I'm presuming perhaps some other people, remember the Japanese sentence structure better – I find it helpful in other languages too – and should not be "marked down" in every case, IMO. Certainly that's the putative rôle of the "Another correct translation:" prompts. I wish they would offer a more "English (Traditional)" version or two, sometimes, where they currently have some very American-English suggestions, though.
Most sentences sound the most natural when ended with a preposition, and while some people or some publications might discourage it, I would say it is a good way to improve readability and comprehension. Even when things are grammatically incorrect, writers will make exceptions when it helps a sentence make more sense.
The "no prepositions at the end of a sentence" rule is a leftover from a time when Classical Latin was thought to be the purest and most logical language, and therefore worth emulating. While leaving a preposition at the end of a sentence is a grammatical error in Classical Latin, it is not an error in Modern English, and never should have been seen as such.
That whole preposition thing isn't really true. In Latin grammar you can't end sentences with prepositions, but there isn't really any such rule in English. Some people just think the Latin rule carries over since a lot of English is derived from Latin, but that doesn't necessarily mean that every single one of their grammar rules carries over, too.
More reading / source here: https://blog.oxforddictionaries.com/2011/11/28/grammar-myths-prepositions/
Yes, using personal pronouns of any kind is discouraged, including I, you, he/she, they, etc. Typically when a pronoun would be used in English, the subject is dropped in Japanese and simply assumed by context.
However, there are some times when you can't avoid it. When possible, it is better to refer to someone by their name, title, or relationship, rather than using anata. I believe that the same is true when referring to their relations, but a native speaker would be able to answer this question with more authority. I suspect that practice sentences that include "anata" are taught because it makes the correct translation easier to guess, not because it is a common way of speaking.
When it is unclear or necessary, you can use anata or anata no, but it is much less common than in English. And referring to someone by their name when talking to them directly is much more common. It would be weird to say "Is this Frank's bag?" when talking TO Frank in English. But in Japanese, that would be considered more polite than saying "Is this YOUR bag?"