Take a look around you in your home at everything with some sort of logo... Every brand you see is a flat cartoonish image, yes?

Just a few things that surround me that have no images:
Bank of America logo: blue and red
Pepperidge Farm Goldfish - illustrated barn
Goldfish logo - Black and brown
Samuel Adams OctoberFest - lots of colors but no photographed images - everything is illustrated
Adobe logo

just naming off a few things I see in my general area...

Adam is right...anything you want your logo to be, it can be.

But your sister is also correct in that you don't really want to put a photo in a logo. A lot of people will trace an image in vector and make it a flat 1 or 2 colored image