I definitely wouldn’t say the clothes were inappropriate. I assume she was being herself. And kudos to her for that. Wouldn’t it be worse if she lured you in with neutral jeans and plain tops, only you get back to her place, you peek in a closet (curiousity gets the best of you) and it’s all bunny jumpers and novelty sweaters?
My read is this woman really wants to be a mom. Also, she probably wants to be perceived as a morally good person. I dress a little bit like that, for no good reason since I’m not a mom or a teacher. I was raised in the midwest and I have to admit sometimes clothes like that just seem comfortable and appropriate. They don’t attract negative attention and people tend to perceive you as “a nice woman.” Perfect strangers are more than comfortable asking me to watch their belongings.
I do, however, have other types of clothes to wear when the cutesy and comfortable stuff would not be appropriate. My suggestion is first to ask yourself this: if you were in a long-term relationship with this woman, and that is how she dressed to go out shopping on a Saturday afternoon, would you be OK with that? If you would, then give her a second chance at an evening date, some kind of dinner & a play, or dancing type of thing where evening clothes with a little more vavoom are expected. If she rises to the occasion, maybe things will work out, and if she doesn’t, you’ll know you weren’t too hasty to judge.