I think your niece will be fine - if she was developing diabetes I think her BG would be a lot higher than 6!
All the other symptoms are probably due to the infection. Ketones are a normal byproduct of your body metabolising fat, children who are ill generally go off their food a bit so that's why the ketones will be there. They are only dangerous if you don't have enough insulin present to deal with them and they build up to high levels.
When my daughter was little she used to smell of ketones every time she had a cold! This made me slightly anxious at first but the smell always went away again when she got better so I learned not to worry about it. Then on the night of her 6th birthday she went down with a really nasty virus that lasted a week, and even after she recovered the ketone smell never went away; at 8am her breath smelt as if she had just troughed a large bag of Haribos when she had eaten nothing since the evening before. This made me worried but as she seemed fine otherwise I decided just to keep an eye on her and not panic. Even my mum (also T1) told me I was worrying too much! Then daughter started getting hungry and tired and a bit thin, but that could just be a growth spurt so again I didn't take too much notice. She was also drinking lots but we didn't pick up on that one at all, just thought she was being a greedy guts with the apple juice, if we gave her water instead she didn't drink it so quickly.
The crunch came after we went to a family party and everyone was commenting on how skinny she was, also she necked a couple of glasses of water faster than she would normally drink apple juice - alarm bells ringing then! The next day she just lay on the settee and couldn't even be bothered to decide what to watch on tv, and the day after that ate four whole Weetabix for breakfast... Saw GP on a Thursday. He clearly thought there wasn't much wrong with her and that I was just a neurotic mum, did a urine test which he said was normal, but then just to be in the safe side he referred her for a full battery of blood tests. He said it had to be fasting so we had to wait another few days for that. Blood test was done the following Tuesday and daughter's health had started to decline rapidly by then, she would hardly eat anything other than yogurt because nothing tasted right. On Wednesday morning she was so weak she could hardly stand up, never mind walk, so when GP called her back in my hubby had to carry her everywhere. Fasting blood sugar was 18, finger prick test off the scale, urine now full of sugar and ketones. She was going into DKA so we had to rush her into hospital. Hospital lab test came back with a BG of 46! She was in hospital for 3 days, but I think if we'd waited one day longer she would have gone into a coma and been in intensive care.
I will always regret not taking her to the doctor a bit sooner, or arguing a bit more loudly about getting blood tests done more quickly; at the time I didn't really know about DKA though; and I do tend to worry too much and most illnesses turn out to be nothing serious - right up until the very last few days I was still hoping that I might be wrong! I have since learned from a DSN that a fasting test is correct for diagnosing type 2 (which is what GPs see most of), but for a child with suspected T1 they should really just do a finger prick BG test and if that is anywhere above normal then refer them immediately to hospital for more thorough testing.
Edit: just seen that you posted the good news while I was writing this - glad she's ok and nice to know that the doctors were thorough!
It's thought that environmental problems may be impacting people on an epigenetic level, so those with a susceptibility are being exposed to the conditions to trigger the autoimmune response - all the more reason to put money into research and find that cure!