For clarity I haven't read your post yet. I will read it after I make my reply here. While that seems illogical, for me it helps because I find that when I replay after reading a post sometimes I get stuck in a mode of thinking and can't break out of it without some time away. So i'll read after I make my comment below.
I've tried SL and I went to boobylopolous (spelling). Some of hte textures and models are very nice. One of hte things that's a turn off for me is the clothing. It's more like a texture than ti's clothing! For me what's imagined to be underneath and what's on the surface gives me greater arousal. I love the clothes women wear. So when I see clothing that looks like a texture it just doesn't do it for me like I want it too. Other than that, as they continue to add to the polygon counts and so on, it's eye candy and welcome.
I wholeheartedly agree with you. The use of painted-on textures for clothing in Second Life is one of the big killers of verisimilitude. Jeans look like they're vacuum sealed to your rear, and for women who don't use prim breasts, T-shirts look vacuum sealed to their breasts, rather than taking a short cut across the concavity of cleavage the way a real top would, so that text and art on T-shirts are warped into an unrecognizable blob.
That said, prim breasts with clothing layers help in this regard, because the clothing layer is pretty much, as they say in the math biz, the convex hull of the bust. It's not perfect, of course; to be perfect, you'd want stress wrinkles and jiggle... but it's a great advance.