It's not really appropriate. Beds are very personal spaces. You should encourage her to sleep in her own bed. It can also help her develop good sleep habits and a sense of independence.
It's not appropriate. You should gently but firmly say no. You can offer alternative options like setting up a comfortable sleeping area nearby for your cousin, like on a couch with extra blankets and a pillow. This way, you maintain appropriate boundaries while still being hospitable.
There is the story of 'Goodnight Moon'. It has a simple and peaceful plot that can help her relax. Also, 'Where the Wild Things Are' can be interesting. Although there are some wild things in it, in the end, the boy returns to a warm home, which can make her feel safe.
This is a more serious situation. You definitely need to involve your parents. They can have a long - term talk with her about proper behavior and the importance of privacy. Maybe set some clear rules in the house about where it's okay to be naked and where it's not.
One way could be to take away her privileges like not allowing her to play with her favorite toys for a while. For example, if she misbehaves during playtime with friends, this can teach her that bad behavior has consequences.
One benefit is comfort. Your own bed is a familiar place, with your favorite pillow and blanket. It gives a sense of security. Another is better sleep quality. You can adjust the environment in your room for optimal sleep, like adjusting the temperature or the lighting.
For a young child, it can be somewhat normal. Young children often don't have a full understanding of modesty and privacy. They may not see being naked as something inappropriate. However, it's important to start teaching them about these concepts as they grow up.
You should immediately address the situation in a positive way. Since she's your little sister, she may be just being innocent or not fully aware of social norms. Take her to a place where she can put on some clothes, like her room. After that, you can have a little chat with her about why we wear clothes. For example, clothes keep us warm and also are a part of our privacy. You can also use this as an opportunity to teach her about good behavior and respect for others' personal space.
First, you should immediately cover her with a blanket to preserve her modesty. Then, gently but firmly explain to her that this is not appropriate behavior. It could be that she doesn't fully understand the concept of privacy yet. You can also tell your parents or guardians about the incident so they can have a proper talk with her about appropriate behavior and privacy.
You can offer her a special treat if she sleeps in her own bed for a certain number of nights. For example, a small toy or a piece of her favorite candy.
You can give them a warm and soft blanket. Also, a small stuffed animal or a favorite toy can make them feel better. Maybe read them a short and soothing bedtime story.