LW2: Loving Aunt, it is not your place to meddle. If you must address this with anyone, address it with her mother. Tell her that your niece has been asking about her family history, and that she should be told about her father if for no other reason than she needs to know her medical history. 

I have a similar issue in my own family-- my brother has two boys by his first wife (she and the boys live across the country), and he has two girls by his second. The girls don't know that they have brothers-- my brother hasn't told them about the boys. The boys are in the 20s , and let's just say that their lifestyle is not something my brother wants the girls to be exposed to. Though I think the girls should be told (they are 13 and 10 respectively), it's not my place to interfere.