This is such a great discussion. I've thoroughly enjoyed hearing everyone's perspective.
Does figure flattery matter to me? I've been pondering. And I honestly don't know.
I think both your outfits (the jeans and the dress) are expressions of your highly intentional style -- albeit very different -- and I like them both on you. I might wear the dress. I love the halter style neckline, the colours, the slightly retro feel of it. I probably wouldn't wear the jeans, but more from a sense that I wouldn't like the *feel* of that extra fabric on me in that place than out of concerns about flattery. I'd wear pants in a different fabric with the extra fabric there, if you know what I mean. If it were more drapey -- like those wild crossover pants I tried on and loved but decided were too impractical with their stupid little tie up.
So....when I look at others, do I prefer them to dress in ways that are conventionally figure flattering? No. Not really. I like to see people with a clear sense of their own style. That trumps all.
For myself, I do care about not shortening my leg line because I'm sensitive about my short legs. But otherwise, I don't think it matters to me. And even then, if I really like a look I am willing to try it at the risk of a shortened leg. At least to see how it feels. In the end, for me, it's more about how I feel in the clothes, I think.
Having said that, I prefer not to wear looks so unstructured that I am entirely swallowed up in them.