"My sister is amazing."
Muthhila (مذهلة) literally means amazing, originating from اذهال (to shock/amaze)
Mumtaaza would be much closer to "excellent". If I say something right in class, the teacher would then say ممتاز and move on. It's what you'd use to describe an object or a situation, for example a piece of steak. Not often used to describe people however, but it may happen occasionally.
An (ان) here is a particle (حرف) which I'd say is a close equivalent to "to" in English. E.g.
You can't say "it is better say amazing" but adding the "to" gives meaning to the sentence. "It is better to say amazing"