OK I'm a guy that tends to use pet names with girls that I'm friends with. Lately I think that's gotten me into a bad situation though... this girl I know thinks I actually like her... and that calling her names like "beautiful" and "sweetheart" is just because I like her. I really do love her... but as more of a sister. What should I do?

Did she actually tell you she likes you? In that case you could tell her the truth, that you do think she's beautiful but you don't like her that way, or you could say something like you're not looking for a relationship right now.

If you just think she likes you or she hasn't outright said anything, you could try to make her see you calling some other girls the same names and she will probably realize that you do that to everyone but in a purely platonic way.

Why not have a talk with her?

What makes you think that she thinks this? Has she said/done anything to give you this notion? Maybe you could show her that you do this with other girls too? Granted, if she likes you, this may put you in a worse position...