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I have a little sister around the same age of your niece. She loved Melee and played it with me all the time. Heck, she and I played SSE together as well. Good times there.

However, she also loved Super Mario Sunshine and Galaxy, and even though I told her it was too hard for her, she got all the way to Windfall island without my help in Wind Waker, which impressed me. ^___^

So I'd go with Brawl, it's a blast to play with anyone, and a lot of the modes are now Co-op.