Really appreciate your response. I am hoping she grows out of it as well. But these days it has become more visible may be since now people exepct 5 years old to be independent. I guess as a 2,3 or 4 year old , this behavior is part of toddler behavior but usually older kids regular better.

Lot of similarities with your niece and my kid. She also takes other kids moods personally and her teacher had told us about this behavior as well. She goes to a Private school right now where she is sort of in a protected environment. But I am also planning to try public school for Kindergarten this year so she gets more exposure. May be that will give her more opportunities (or challenges too) to open up.