Having family member sing wedding processional

I am curious about this as well, since there is a hymn I would love for my processional music, and was planning on having a soloist sing it! (I will have a separate organist as well, so it would be both instrumental and singing.)

As someone who has been a wedding singer, having the proper equipment etc will be extremely important.
As someone who has seen the perils of people doing it cheaply (renting or buying super cheap equipment) and having a family friend sing, it can be done...but more often than not it isn't done WELL.
Depending on how big your venue is and if it is done inside or outside etc. an instrument alone may not need a mix ans speakers (piano, guitar) though they help..but a singer will need a mic and speakers of some kind and they will need to be set up properly to ensure no feedback and be tested etc....there are a lot more variables than just "does she sing or not?".

Making a playlist for cocktail hour isnt that big of a deal...but if you are going to have a DJ for reception they need to be set up and connected long before their start time in order for things to go seamlessly, it is best to just have them provide the cocktail hour music as well and should not cost a lot more (if any).

Can you talk to his niece and see what she would prefer to do? Maybe she would be ok with just playing and you can go back to the original plan that you wanted. If she were singing would you have to hire her some accompaniment or have her sing to a backing track?

As for cocktail hour does her singing in the ceremony change whatever you originally had planned? Were you going to ask her to play her instrument during cocktail hour, and can she still do that even if she sings in the ceremony? I don't think it would be too risky a move to use a preset playlist for just cocktail hour, as long as your venue has the proper setup for it.

Thanks everyone for the helpful feedback. After all that thinking and over thinking i discovered that without realizing it we had already paid our dj to do our ceremony as a part of our package so we are going to have the dj do it.