Is it a big deal my sister-in-law saw me get out of the shower, or did it upset my wife that she asked how my?

I don't think that you're at fault here, since the SIL walked in without announcing her presence in the bathroom. Although, once you saw that it wasn't your wife you should have covered up better or got back in the shower. You actually should have told her to leave the bathroom and wash her hands in the kitchen. Just explain to your wife that you were just so shocked you didn't know what to do. You should ask your wife to sit down with her sister and have a talk with her about proper etiquette when at someone else's house, even if it is her own sisters house.