Sister in law dress

I think she should wear whatever she likes something she feels comfortable in as shes not part of the wedding party it seems a little confusing to dress her as such. a pretty dress from lulu's or azazies party section would be perfect

I would let her choose? If she’s an usher she could pick her colour or you and her choose together! If you have her match people could think she’s part of the bridal party!
You could have the other usher match similar to her?

I don't think she should match what the bridesmaids are wearing just because your guests might think she's part of the bridal party. I personally wouldn't tell her what to wear unless it really matters to you that she matches

She should be able to wear whatever she wants unless you want the usher to match the bridesmaids. If she does match though, people will think she's a bridesmaid. How much that matters is up to you.