Originally, Sharon was just Peggy's younger sister (it was about 20 years since WWII when she first appeared) and it's not totally unlikely that there could be that big an age gap between siblings.
20 years later they changed it so that she was her niece.
Now, they're going to eventually make her Peggy's GREAT-Niece.
Maybe it's for the best they just say that Sharon is related to Peggy but not say how anymore.
Physically, I think Alice Eve is the best choice for Sharon if they ever use her.