Katie - I somehow missed your earlier posts, but I'm very impressed with the way you handled yourself with the bride. You sound like a great, supportive friend. And since the bride will be your SIL, it sounds like you're starting this very special relationship in just the right way.
At my own wedding my only attendant was my best friend - a gay man - and since he has a better eye for fashion than anyone I know, I let him pick his own suit. But then again, I was much older when I got married, and a bunch of 40+ women in lavender taffeta is not a pretty sight. I say enjoy the experience while you're young, because it's great to have these kinds of memories and stories. I think the "awful bridesmaid dress" is a female bonding ritual, something to look back on and laugh about years later.