Learn Portuguese (Portugal): A chave da irmã é pequena.

Portuguese doesn't use an apostrophe "s" ('s) to show possession. Instead, you phrase it as "the key of the sister". The word da is a contraction of the preposition de (of) and the feminine definite article a (the). So, da irmã literally translates to "of the sister".

Why is it pequena ending in an "a" instead of pequeno?

Pequena (small) is an adjective, and it must match the gender of the noun it describes. Here it describes the key (a chave), which is a feminine word, so the adjective takes its feminine form. It happens that irmã is also feminine, but the adjective is specifically matching a chave.

Would it be wrong to just say "A chave de irmã"?

Yes, it would sound unnatural here. When we talk about a specific person's possession, Portuguese usually requires the definite article a (the) before the person. Because you need both de (of) and a (the), they must combine into the mandatory contraction da.

What does the little wave (tilde) on top of irmã do?

The tilde (~) marks a nasal vowel. This means the air flows through your nose when you say the "a". It sounds somewhat similar to the "an" sound in the English word "pang", but you don't actually pronounce a hard "n" or "g" consonant at the end.