I have a 2 layers in Sketch the iPhone frame and the image in the background.
This is what it produces
Is there a way to hide or erase of that extra area using Sketch ?
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I'd try masking the image with a shape.
Make a rectangle with rounded corners in the middle of that phone border and use it to mask the image.
I did this using an old version of Sketch, so there may be some differences.
I made a rectangle with the border hitting somewhere inside the phone border. Since the phone border is more than a few pixels thick, you don't have to make this very accurate. Just make sure it stays inside it.