I'm sure your sister-in-law is sincere, and I hope you will respect her for her desire to please God. The Bible says we should be "blameless and pure, children of God without fault in a crooked and depraved generation, in which you shine like stars" (Philippians 2:15).
From what you say, however, she has lost sight of two very important truths. The first is this: We are saved solely by our faith in Christ, not by our works. No matter how good we are, we can never save ourselves—because God's standard is nothing less than perfection. But Christ loves us, and He did for us what we could never do for ourselves by dying on the cross for us. The Bible says, "Since we have been justified through faith, we have peace with God through our Lord Jesus Christ" (Romans 5:1).
The second truth is this: God wants to change us from within by His Holy Spirit. Rules alone won't change us; we need the help of the Holy Spirit if we are to live the way we should. And when we allow Him to work in our hearts, we become more and more like Christ—not just in purity, but in our love, our joy, our peace, our patience, and so forth (see Galatians 5:22-23).
Pray for your sister-in-law, that she may begin to experience the joy of trusting Christ and following Him. And make sure of your own commitment to Christ, for He alone is our Savior.