Which Sesame Street character is Snuffy's baby sister?

Snuffy’s baby sister on Sesame Street is Alice Snuffleupagus.

Alice Snuffleupagus is the younger sister of Aloysius Snuffleupagus, better known as Snuffy. She belongs to the same fictional Snuffleupagus family and is identified in character references as Snuffy’s baby sister. Her name is Alice, not Granny Snuffle, who is an older family member.

Snuffy first appeared in 1971 and for many years was treated by the adults on Sesame Street as Big Bird’s imaginary friend. That storyline changed in 1985, when the adults finally saw Snuffy and accepted that he was real. Alice belongs to the later-established family background that expanded the character beyond his role as Big Bird’s enormous best friend.

The distractors refer to unrelated characters or relatives. Curly Bear is part of the Bear family, Natasha is an infant monster, and Granny Snuffle is Snuffy’s grandmother. The similar family names make the last two especially easy to mix up, but Alice is the canonical answer.