As a retired academic with 30+years in a university I can throw some light on graduation ceremonies/days.
Firstly, the ticket issue is universal, and I would advise your niece to put her name down early for more tickets. It is quite true that these are always limited to two in the first instance, but that's on the assumption that all those who are supposed to graduate do so, and many either decide they don't want to attend, or don't want to use their tickets so it is often the case that some graduates can end up with a couple of extra ones. So as a first step she should register her request for more tickets, and also ask her friends if they are really going to use all of theirs.
The next thing you should think about is who your niece really wants to be there - does she want you because instinctively she feels you are the right person to be sharing in her achievement as you've supported her emotionally and financially? If so then it's you who should be there, regardless of your sister's feelings. And then finally you should remember that the actual graduation - watching the person walk across the stage and receive the certificate, is only a part of that day. Often universities televise the event and relatives who can't fit into the room watch it from a lounge nearby and then join the graduate for refreshments immediately afterwards. You can all share in that day but you have to recognise that it's the graduate's day so what she wants she should be allowed to have. You sister can still go along wearing her new outfit and go for a meal with your niece after. And if she turns up early in the day she could still also have a nice photograph taken with her daughter.
Good luck.