My nightclothes are functional, yes, but I don't like them to be too shabby or drab --- they need to travel with me sometimes, and I don't want to wear anything that would be too embarrassing if caught in a fire drill or something! There is the odd camisole for unbearably humid and hot nights, but mostly it's cotton shorts or pajamas with a V-neck T-shirt, long cotton kaftan or knee-length nightshirt most of the year; for winters, flannel pajamas and a fluffy, fleece-y robe.
The at-home clothes are what I'm still working hard on. The aim is what Suz said: comfy as loungewear but presentable for stepping out to the corner store, at least (any further and I change at least partially and add lipstick). The norm used to be for clothes from the normal 'working' wardrobe (for school and office and generally around town) to be demoted to 'at-home' when they started showing wear. Unfortunately, it took some years of working at home to realise this meant I was never wearing the nice stuff any more and the shabby just kept getting disgraceful meanwhile. I've started to buy keeping 'at-home' comfort and presentability in mind now, and demoted 'at-homes' shift to the 'messy chores' capsule (for painting, gardening, repairs etc). But for me, these still have to be distinct from office/about town to allow for greater freedom of movement as well as standing up to tropical heat and humidity (less of a problem in an air-conditioned office).
So I typically wear tunic-length tops, shirt-dresses or Indian tunics with either leggings or loose salwars or harem pants, or else T-shirts or woven tops with A-line skirts or stretchy capris or loose drawstring pants. I'm still working on getting them a little smarter than that. I'd like to add a few dresses too.
I don't wear any make-up at home. Lip-balm is the limit. I used to wear a tinted one, but I've gotten tired of the glossy sheen --- I prefer a matte lip. I also used to wear eyeliner but I've gotten lazy about removing it too and am veering towards fewer and fewer 'products'. Nailpolish has also fallen by the wayside, and I'll be throwing my stash out soon --- don't want them around an infant. The less I do to it, the happier my skin feels and the fewer chemicals I'm washing down the sink/shower