Should I be upset or should I let it go?

I think you need to distance yourself from her. Just because you're related doesn't mean you have to be best friends. It seems she is depressed in some way and she is just out to push you down all the time. You sound like a nice girl who cares about other people's feelings a little more than you should. You should try to care about yourself a little more. You're worth it :o) Best of luck to you.