I recently bought this set for my niece for her birthday, when we were finished setting it up we noticed a larger orange piece that we couldn't find a place for but was in the set and in the back of the book where it outline what pieces there/how many of them. I just wondering for sure what the piece goes to?
That part is the new Brick Separator which LEGO includes in most bigger sets:
It's not part of the construction itself, but is a tool to allow you to easily disassemble constructions. You can compare it with the older version in this question on how to separate 1x2 plates.