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No, delete account does just what it says, deletes it from the device. It does not affect the data stored in the cloud.
 
You don't like or trust iCloud because you clearly do not understand how it works. Your sister got an iphone on your account so why wouldn't AT&T set up as yours? They are not stupid as you insinuate they actually did the right thing as far as customer service goes.

Tell your sister to get or use her own apple id; then under settings,iCloud change the apple Id from yours to hers. After which your contacts and cals will not be synced with each other.

The other option is to keep your apple Id on her phone and under settings, iCloud turn off cal, contacts and whatever else you do not want her phone to synch to your iCloud account.
 
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