I'm gonna disagree with the 'horrid' bit. Whether it suited Lightning's taste or otherwise (or even Bhunivelze' or Etro's taste for that matter) a lot of people (even the developers) liked those designs enough to implement them in the game. If they truly were 'horrid' as you say, they wouldn't have been used.
That, and it's not just about style, it's about function.
Lightning's initial outfit change represented her station as Etro's guardian. Maybe it was old fashioned (or as she would say "Dressing up like a fairy tale"), but it served her purpose in battle...She even had a Gunblade function on her sword.
Her outfit as the 'Savior', is a bit more excessive in terms of body armor, but it suits that role, which if you think about it closely fits what the Warrior of Light was...a bit of a 'blank slate' perhaps in terms of starting over...but an all-seasoned traveller who is 'ready for anything' is the meaning I think behind the design. I think of it as something like what a medieval member of a S.W.A.T. team would wear.
As for Lightning being out of character... Well, its my impression that Light was headstrong and decisive no matter the situation, and even in XIII-2 that didn't change. She decided things on her own, and YES (as usual) it got her in to trouble. I'm sure her more 'emotional' side being expressed was a shock to players of XIII-2, but keep in mind she hasn't seen her sister in how many years? And all the fighting against Caius was probably an emotional drain as well...I wouldn't be surprised if she had few emotions left that hadn't gone dead after all was said and done anyway. 500+ years of fighting and then ANOTHER 500+ years can change people, I'd think.
I think in Lightning Returns, when they said we'd see new sides to her... She's going to rediscover who she was, certainly. And part of that is discovering who her friends were. That's part of the healing process. If you've ever seen people go through a mid-life crisis you'd know they tend to lose a bit of who they are, or rather who YOU think they are. I'm sure the same could be said of Caius who probably lost it eons ago.
In fact, this whole game reminds me of the events in the World of Ruin in FF6, when Celes goes out to find her friends while somehow becoming something other than a Magitek Soldier.