Personally, I think that this girl may once have been friendly with him, but probably isn't interested in him in a romantic way. I think it may be as simple as that.
She knows he likes her, as does her family.
She hasn't responded to his interest and has blocked him online.
When she was being friendly towards him, before, she probably had no intention of him taking it the wrong way.
He feels that she hasn't responded to him ~ but she has. She has ignored him and blocked him. I think that her message is quite obvious. At present, she doesn't want any kind of relationship with him at all.
What she, herself, thinks & feels is, of course, a mystery. Maybe she does like him, but doesn't want to lead him on, or doesn't want to risk the relationship she already has.
Maybe she doesn't feel anything for him, at all, but doesn't want to be unpleasant or negative towards him, because she is a pleasant friendly girl ~ which is what appealed to your friend in the first place.
If he is so interested that her father thinks that he is obsessed, then it's no wonder that her sister watches him.
The boy needs to be let down lightly, but he needs to acknowledge what he must already know.
This happens all the time to teenagers (and many teenagers are shy, even if they hide it ~ especially boys). He will find Miss Right in due course, but this may not be her.
