My son had reflux and did very well on Prevacid. We moved and had to change doctors, and his new pediatrician said that Zantac was the same and more commonly prescribed, so we switched. He started crying again the first day he took it. We tried it for about a week and then asked to go back to Prevacid. He was better immediately after we switched, so consider changing medication if you can. His first pediatrician said that some kids just respond better to Prevacid and this turned out to be true for us.
Also, has she tried a swaddle? We used the official "Miracle Blanket" and it was AMAZING! It was the only swaddle he liked because it's soft and gentle and he really couldn't "escape" and startle himself awake like he did in the cheaper ones (Halo, etc.). It is expensive but sincerely worth it, and I've seen them sold as used on Craigslist and eBay. Our son would get calm the minute we laid him down to swaddle. It was like he was relieved not to have so much movement and stimulation. We called him our little baby burrito. :-) He loved it so much we kept him swaddled well into six or seven months, possibly longer (transition them with one arm out at first, then the other once they can roll themselves over, and then move on to a sleep sack).
He also loved hanging out swaddled in his swing and eventually he would swing in there without the swaddle. He didn't like vibrating bouncers but he loved the swing so try different things. We also had a bassinet topper for his stroller and I would just roll him around the house in it. He liked rhythmic motion and it allowed me to get some things done and not have to hold him all the time. I could even sit at the dinner table with one hand moving the stroller and the other eating. Hah! The things we do for our kids :-) Some people love carriers and slings for this same affect, but oddly enough, my son hated being in them and I hated having him attached. But maybe it would work for your sister?
Oh, and I used the "dryer method" once or twice in a moment of despair, and that worked! What you do is put your child in their car seat and place it on top of a running dryer. The movement, white noise and warmth all help. He also slept well in the car so I'd drive the long way to the grocery store on the other side of town, just to get him to nap.
Our son was also a light sleeper, so we used an air purifier to provide white noise next to his bassinet.
2.5 months is too young for CIO in my opinion but I do recommend she read Dr. Weissbuth's book, Healthy Sleep Habits, Healthy Child. It gave me real peace of mind to know what's normal, when, related to sleep. And I took a "modified" approach to CIO, returning to my son every five minutes to calm and sooth before leaving again. But I didn't do this until he was older, maybe four or five months? Sorry, I was sleep deprived, I can't quite remember.
And lastly, if she's using nursing as a way to soothe, that's not the end of the world if she can get the reflux under control. But she could also try to pump and bottle feed, to see if it's really that the baby wants to eat, or if she's just finding comfort. For comfort, my son only took to one kind of pacifier, so try multiple kinds. But some kids just don't like them.
Definitely she should keep talking to the pediatrician about her concerns, no matter what. And I would change doctor's if they make her feel like she has no reason to be concerned. Even if a doctor thinks or knows you're crazy, they should always take you seriously and provide information to calm your worries. Especially with your first child.
I hope something I've written helps. I know it's little comfort, but it's true... this too shall pass.