Kate, it's so hard for kids to make the move out on their own, and for parents to accept that.
I am the mother of two teens. My daughter will turn 16 on Tuesday. We are constantly battling about her freedom and how that comes into play with our values (see my avatar).
If I were your father, I would also be upset about your sister moving in with her fiance. We (parents) shouldn't change our values just because "the whole world is doing it."
On the other hand, we can't be judgmental. It sounds like your dad is trying to come to terms with this. The fact that he asked about your sister means he hasn't written off the relationship.
It sounds like he is also concerned about where you stand. Perhaps you two haven't had this conversation before? Maybe y'all need to have a heart-to-heart. It sounds like your relationship is strong enough to handle that. He may not like what he hears, but at least he'll know where you stand on various issues, and he can come to terms with how he feels about that in his own time.
I don't think you necessarily need to apologize for "disappointing him." You may not have. I think you just need to talk to him about how you feel and how he feels.
One thing, though...you should not be the go-between with your sister and your dad. They really need to work things out themselves. It puts you in a bad position and creates the potential to stress the wonderful relationship you have with your father.
to you. I know it's tough. It doesn't seem like there's an easy answer here.