I'm nodding my head at a lot of what Suz says, that audience or perceived audience can help creativity and execution. It ups your game whether you are dressing or writing or crafting.
Like someone else mentioned, I see 'fashion' dressing as a form of play. So while audience matters, some audience matters more than others to me out and about in daily life, primarily those who are interested in this form of play as well, who see humor and fun in it rather than srs bizness. So I do things like theme dress -- wear outfits loosely inspired by the movie I'm going to see (Victorian tights for Grand Budapest Hotel, leather and wool for Mockingjay).
I think about audience in a more serious way for more serious settings and interactions, and keep my overall goal for the outcome in mind while planning outfits in these cases. I think more about dressing for physical safety when taking the bus at night for instance, than for going out to drinks with my husband. Also I understand the teacher under the spotlight thing, been there, done that and it definitely can help with developing both dressing as armor strategies and a thick skin where you let a lot of what the peanut gallery thinks just roll off you.
But I have trouble with the idea of 'general' audience as something that I consciously consider and try to please with dress. Partly it's that every form of creativity that is publicly exhibited has fans and has detractors, people who don't get it, don't value it, or find it threatening. From personal experience I've found for myself that this is often quite unpredictable, and the same piece that collectors or a gallery might love, might get me hate mail. In that case which audience do I consider? Whose opinion do I value and whose do I ignore? I have to ultimately go with my gut and from a place of courage rather than fear.