Learn Italian: Niente è peggiore di questa situazione. - Nothing is worse than this situation.

Peggiore is an adjective, meaning it describes nouns or pronouns. It is the irregular comparative of cattivo (bad). Peggio is an adverb, which means it describes verbs (actions), like saying "he sings worse". Since we are describing the pronoun niente (nothing) compared to a noun (situazione), we must use the adjective peggiore.

Since peggiore ends in -e, how does it change to match masculine or feminine nouns?

Like other adjectives that end in -e, peggiore is exactly the same for both masculine and feminine singular words. If you want to talk about multiple things, the plural form becomes peggiori for both genders.

Why do we use di for "than" here, instead of che?

In Italian, you use di to say "than" when you are comparing two nouns or pronouns. Here, you are comparing niente (nothing) and questa situazione (this situation). You only use che when comparing two adjectives describing the same thing, or when comparing verbs or adverbs.

Why isn't there a non in this sentence, like Non niente è...?