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Exactly. She was probably deliberately being loud to alert everyone else in the house to the danger present, so they could hide, and so Frank could act. And yeah, he knew she wasn't Rachel, he probably just shot her to silence her before she drew too much attention to him. And thus also, to avoid spoiling the ending for the audience.

She said "I'm the one" he killed her before she could say "who hired you" my guess was he knew Frank was a good bodyguard, he entered the house and the sister spots him and makes alot of noise his priority imo was to shut her up and kill Rachel or escape. I don't think he mistook her for Rachel as he nearly had sex with Rachel he certainly knew what she looked like imo it was to shut her up before frank heard her and no witnesses (although we later see him in a balaclava but I think that was purely done so the audience didn't recognise him and spoil the ending)

Could have been dark enough for the hitman to mistake them, or perhaps he didn't care who got shot as long as his mark also got taken out.
Also, Nikki told Frank that she didn't know who the hitman was as he was hired by proxy. Perhaps once she Nikki told the hitman that she was the one who hired him, he wanted her dead so she couldn't finger him.
Is very bad to steal Jobu's rum. Is very bad.

Probably tying up loose ends or a death would make Rachel more public and vulnerable.