No, this doesn't look like measles or varicella - the pattern in the photo doesn't match either.
Measles: The rash is a widespread, blotchy, flat-to-slightly-raised (maculopapular) eruption that starts on the face/hairline and spreads down the whole body over days, always with fever (often high, 104°F+), cough, red eyes (conjunctivitis), runny nose, and usually Koplik spots (tiny white spots inside the cheeks) beforehand. It's diffuse and generalized, not a small localized cluster on one patch of neck skin. What your niece has is confined to one small area with no mention of fever or systemic illness, so it doesn't fit.
Varicella (chickenpox): The hallmark is vesicles (fluid-filled blisters), classically described as looking like "dew drops on a rose petal" - a clear or cloudy blister on a red base, appearing in successive crops all over the trunk, face, and scalp first, then spreading, with lesions at different stages (papule -> vesicle -> pustule -> crust) all present at once, and it's very itchy with fever. Your photo shows solid pink-red papules grouped tightly in one small patch, not scattered dew-drop blisters across the body at different stages of healing.
The tight, localized clustering on an exposed area (nape of neck) with no mention of fever, spread to the rest of the body, or blistering at multiple stages still points to an insect bite reaction (papular urticaria) or possibly heat rash/contact irritation rather than a viral exanthem like measles or chickenpox.
That said, if she develops fever, the rash starts spreading to her face/trunk, new blisters appear elsewhere, or she seems generally unwell, that would change things and warrants seeing a doctor promptly - viral exanthems can start subtly. But based on this single photo alone, measles and varicella are unlikely.