A: I think they should change to compliment the character's body. If the armor can morph to fit dwarves and halflings better I don't see any reason it shouldn't morph to fit men or women better. Unless we're just talking about the taking away pants thing I see being discussed in which case yeah, that's kinda ridiculous.
B: I prefer practical armor. I think sexy armor should be left to mods. I don't necessarily care if they want to add a way to transmog it or something for other people but I'd rather default be practical.