There is a setting that says you can import music from iTunes at a certain rate, as you also mentioned, which people often use to save space on the device if all their music is 256kbps or higher and you can opt to convert music to 128kbps (or less) on sync to save space via smaller audio files. If these files have been downloaded from iTunes Match, and are stored on the Mac but have not been synced to the iPhone yet, then changing that bit rate can result in the artwork disappearing. It's something to do with changing the "source" file, as I've witnessed this with both my iPhone and my wife's iPhone. The second I deleted the affected songs from the iPhone, changed the sync bit rate to the stock setting, and resynced the songs again (just dragging them across from music into the iPhone on the left as normal), the artwork was present.
Handy to know, just trying to help. Although it's interesting to see you did not lose your artwork on your sisters iPod.