So this morning my daughter wakes up and we go in to the bathroom and she says "I pee pee like (cousin's name)." I said no, we have to sit and go pee pee. We are girls. You have to sit like mommy. Boys have to stand because they have a penis, we sit because we have a vagina. So this continued 3 more times of her saying she had to pee, just because she wanted to pee like her cousin.
Do you think I handled this well or should I have said something else?

Re: I pee pee like my cousin
I'm sure it was fine. Since girls don't pee out of their vag though I might have said something different, maybe just "Big boys can stand up when they pee, but little boys sit down. Big girls and little girls and grown up girls sit down to pee. Everybody sits down to go poop."
I think it's good you avoided turning it into a discussion about boys' ability to aim because I see that leading to unfortunate puddles on your bathroom rugs... :-)