。
She dotes on that doll as if it were her real little sister.
Literal
She [topic-は] that doll [object-を] real younger-sister [like-のように] dotes-on.
~のように attaches to a noun to form a simile — '[verb] in the manner of X.' 実の means 'real, biological' (as opposed to step-, half-, in-law, or otherwise non-blood relatives), so 実の妹 ('one's blood younger sister') sets up the depth of affection: the doll is treated as if it were actual family. かわいがる ('to dote on, treat lovingly') is a classic verb for affection toward children, pets, and — as here — beloved objects, distinguished from かわいい (the adjective 'cute'); かわいがる is the active showing of love.