friday night i went to a halloween house party hosted by my sister's friend's friend. meaning, my sister has this guy friend, the guy has a big social circle and someone in that social circle threw this party and this guy who is my sister's friend invited her. my sister is familiar with (but not close with) the people in that social circle.

at the party, i made intense eye contact with a girl there and she made eye contact and then i broke it.

monday night i was at a halloween parade 30 miles from the house party. this was on the street, they close off the street and people walk around. a lot of people there, very small chance of running into someone you know.

i was standing there and this girl was passing by. I said "excuse me" and motioned my hand "come here"
she came and said hello in my native language. I thought "WTF? how does she know I am persian?"

I asked her and she said "we met before"
I said "we did? where?"
she said "at the party" at this point I am thinking "she has me confused for someone else, when do I ever go to parties?"
I said "which party?"
she said "2 nights ago"
here is the creepy part, I said her name "ohhhh, you're XYZ?" even though we have never met so that means I have been spying on her?
I said "I didn't recognize you, you look different"

then I interviewed her (not seduce, but interview) and the conversation died and she said nice to see you and left. by the way, i am not the only one who thinks she is attractive, my sources tell me every guy wants her.

I am so stupid, I am sure she has lost all respect for me (this guy has no balls) but is there a way to salvage this?

on the other hand, I am not sure if I want to do this because she will tell me sister "your brother fucked me" or "your brother is incompetent at sex" I dont like my family finding out about my private life.

And your question is?

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this is in the op
can i salvage this? can i fix this?
and a new question: am i being paranoid or am i right that you should not mix pleasure with family?

You have nothing to salvage or fix. The girl was walking past you and you still had to stop her when she clearly knew who you were.

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No you should NEVER pleasure anyone in your family, we frown on that here.

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They call me the cat whisperer, cause I know exactly what the pussy needs.

How many sources and are they reliable?

lol, wtf kind of question is that?
but to answer your question honestly, one source and this guy is known to bullshit. he might be bullshitting. he probably wants her for himself and is trying to discourage me.