If you want to visit your sister in the UK, you should apply for a UK Visitor (standard) Visa (family visit visas were recently abolished). Your question is about accommodation arrangements. When assessing accommodation, the ECO is obliged to consider the various provisions in the Housing Act 1985 and subsequent amendments to the act.
If your sister lives in council housing and you want to use her flat for accommodation, the strongest evidence needed is a letter from the estate giving you permission to stay there as a guest for a given period. If the estate already has a 'generic' letter of permission, you can use that instead but its evidential quality is substantially reduced. And finally, if her tenancy agreement has a clause permitting visitor accommodation, you can use that (also reducing the evidential quality). In the absence of those and with no permission at all from the estate, your application will be imperilled. The fact that your sister has invited you, or has agreed to accommodate you is not taken into consideration when council housing is being used because she does not own the premises and hence does not have the capacity to give permission unless stated in her tenancy agreement.
If instead you opt to stay in a commercial property, like a B&B or hostel, you would not need to submit booking or reservations. Instead they will examine your financial evidence (vis-a-vis your apparent lifestyle) to determine if you have the capacity to accommodate yourself.
It's fine to include a brief invitation letter from your sister if you think it's necessary. You can use Section 9 of the application to explain why you are opting to use a B&B, hostel, etc rather than staying with your sister.
For your final question about needing a bespoke letter from your university, this would be considered unusual and they would wonder why you thought it necessary. Your enrollment paperwork along with your current housing arrangements in Germany should be sufficient. Because Pakistan is considered to be a high risk visa-national country, the evidence supporting your personal circumstances in Germany should be of impeccable quality.