I have been told that I have a fairly good sense of dress (sometimes lol) but I often find something nice to put on, a nice top with jeans & boots work for me. I don't go immediately for the mini and low cut effect because it really doesn't suit me or my body.
That being said... it's what suits your body, your mood and your end results. If you're going to a friends house to lounge around and help them with weeding the garden, wearing a dress doesn't fit. If you are going to a fancy engagement you don't show up in denim cut-offs and a low cut blouse. In between... *that's* where it gets hard but I think if you have some idea where you are going or what you will be doing you dress for the occasion. I just went to a holiday party not long ago and pulled out my black and red formal dress and people loved it. But the week before I was out visiting a friend and I wore a sweater and jeans. I was happy just being accepted and out with friends. The thing is you never know what the wardrobe need is so it's always a good idea to perhaps take a bag with something a little more (or less) formal that you can change into if the situation warrants it. A fairly small bag can hold a pair of heels, a dress, some tights and whatever other items you need.
All other things being equal (and they never are lol) it's really best for you to dress as comfortable as you need but respectful of the occasion. I'm sure around your family a more comfortable slacks/blouse would work for many occasions. Plus if you have family (as you do) who are having a more difficult time with your transition you will make it a little more 'gray' area in their perception.
Good luck and let us know what you decide!