Translation:My little sister likes running.
In English we don't normally distinguish between older and younger siblings do leaving out "little" is fine.
If i recall correctly, it's in order to turn running into the subject. It should be short of (verb)のごと which in english is "the action of (verb)", so it literally translates to something along the lines of "my little sister likes the action of running".
It changed run from a verb to a subject. So we can talk about running itself instead of just attributing the action to people.