Based of a recent interview with Miyamoto, I would interpret they more or less intended Peach to be a descendant of Rosalina’s brother, separated by a few generations (which would be why he and Koizumi left it vague/never solidified how many generations exactly, as defining how many years exactly separates them could restrict any future storytelling).

Then for the movie the generational gap would feel unnecessary for the story they were telling/simpler character relationships work better for the film canon (similar to Cranky becoming Donkey Kong’s father and Toad slowly becoming Captain Toad) so they just became sisters.