You are applying for a standard visitor entry clearance and you are visiting a qualified family member (your sister). Your sister lives in a council flat and hence it's hard to get the owner's permission so you want to stay in a nearby hotel or hostel. For reasons not worth going in to here, the form assumes that visitors will stay with their family and parts of the form are built up under this assumption.
For the question on the form: "What is the main address and contact details of where you will be staying whilst in the UK? Name of Person / Hotel" you can write in the details of the hotel/hostel where you will stay.
For the questions asking you to identify your family member, write your sister's details including her address.
For the other part of your question about the bookings and flight tickets, the guidance is really clear that they do not need these things and there is no reason for you to think they are necessary.
If you are still uncomfortable about it, you can go to Part 9 of the form and write something like...
This application has been informed by your guidance and accordingly
hotel bookings have been withheld pending your request that I provide
them. When requested to do so, I will obtain and provide the appropriate bookings.
Optionally you can also go on to explain why you are choosing to arrange your visit like that.
Your application will go to the hub in Paris or Croydon and get a quick turn-around. They will be looking to see if you have the financial capacity to stay in a hotel, so be sure your bank statements (salary slips, etc) are high quality.