"I am his younger sister."
It would definitely be helpful to throw more Kanji. Luckily, some words show the Kanji if you tap on them to see their definition. As far as I know, DL aims to prepare you for the JLPT N5.
To be honest, です is a mark of polite speech. The sentence, in essence, is correct without it.
Watashi is usually ommited in other examples. Why I can't omit it in this sentence?
You can. I omitted it and it was correct, so maybe it was changed if you were marked wrong.