I'm a cardiologist (heart physician) so i'll try to answer your questions as i can. First of all you should consult her physician because i think there is no correlation between biopsy and ascites so you should make sure it is not an abdominal collection (other than ascites) which may be due to injury during the biopsy.
Answer on Q1 yes she can but it should be well investigated, liver disease alone could cause ascites when liver function is disturbed (because one of causes of ascites is decreased albumin "a protein which is synthesized by liver) paracentesis could be performed under certain circumstances and according to its severity, so she should perform the following laboratory investigations (serum total proteins, Serum albumin, prothrombin activity and INR) then she may be recommended to receive human albumin or plasma according to the results.
I should also tell you that any malignancy could cause fluid collection in abdomen, around the heart or around lungs (which called serous cavities) so i told you to consult her physician who could differentiate.
Answer on Q2 ascites in general is not a good sign but don't worry it could be managed.
I hope i gave you some information which may help you, wish your sister and my mom speed recovery.