Translation:I am his younger sister.
You can see these words are actually just putting elder/younger/brother/sister together.
The concept of these words are not exactly identical to Brothers and Sisters. It includes the person of reference.
It would mean the person answering has 2 brothers, not 3.
The closest there is in Japanese is きょうだい, but I think it is inherently plural. That is, you would have to say something like "we are brothers" or "he/she is one of my siblings".
I think it doesn't make sense to a Japanese speaker to refer to their "older brother" as just their "brother" because the words which give more information exist and take about the same time/effort to say. By contrast, in English specifying the relative age of one's sibling requires an entire extra word!
かれ means "he/him", which makes it gender specific. If you wanted to make it gender neutral, you would have you replace かれ with あの人 (あのひと, "that person ").
But, since it is also a pronoun, it refers to a specific person and it can only be omitted (and retain the same meaning) if it is obvious from the context which person that is. I can't really say whether or not that is "most circumstances". (Note that if you were to omit かれ, の would also need to be removed, since Japanese particles are postpositional.)