What are the alternatives for dealing with the presence of my sister and mother at an engagement session, when they do not adhere to the Shar'i dress code?

You must advise your sisters and mother about the obligation of hijab (definition) and the prohibition of displaying adornment (tabarruj), and that a suitor is a stranger just like any other stranger. If your sitting with them while they are displaying adornment prevents fitna (temptation/discord) or lessens evil, then sit and continue to denounce their actions. You must strive to invite them and teach them the rulings of the Sharia (definition) with wisdom and gentleness.