I don't doubt that she will have already spoken to her gynaecologist about sex during pregnancy. In most circumstances, this is perfectly safe, as long as certain considerations are taken. In the latter stages of pregnancy, the missionary position is not really appropriate. Neither is very forceful sex. Apart from that, there is no reason why you shouldn't continue to enjoy an enthusiastic sexual relationship. Even at the very late stages of pregnancy, she could perform oral sex upon you, or if the two of you enjoy it, you could continue with things like anal sex. Many women find that their breasts become more tender as the pregnancy advances, so you may have two desist from any kind of breastplate, but then again, some women find it extremely exciting when their breasts become more tender, so let her be your guide in this regard. The reality is, she will in all likelihood guide you in what she wants to enjoy, and what feels uncomfortable to her. So let her take charge, and enjoy it.
Some women go completely off sex during pregnancy, while others find themselves even more sexually excited, and it seems like your sister-in-law is one of those women who finds their libido has increased. Whether or not you should be having sex with your sister-in-law is not for me to say. A person's morals of their own business, and we each have to decide what we find acceptable, and what we don't. But from a biological point of view, unless her gynaecologist is said otherwise, there's no reason why you shouldn't continue enjoying a full and very satisfactory sex life together.
If either of you have any doubts about this, talk to her gynaecologist, and follow the advice given.