BACKSTORY
I'm working on a graphic novel that's years in the writings, dreaming and planning. I've tried several CG packages and, after consideration (price, quality, speed, etc) to use makeHuman and Blender as my software of choice. They're great, love them, moving in with them and putting my pictures on their mantle.
My experience in Blender is not what I would call 'expert'. At all. I can model and sculpt, eh, decent enough. But the makeHuman software presented a solution to 'speed' by creating great humans that are posable and importable to Blender. Blender is great for rendering, lighting, scene layout and over-all flexibility.
Now, I've gotten hair going well enough, and clothing I've modeled some 'tester' cloths and parent them to the character's armature and, sure enough, the shirt follows the arm bend .... for the most part.
Here is the settings in the panel for the shirt, parented to the character's armature.

And here is the arm bent - not even a lot - to show how badly the shirt is bending into the character

And just to answer any extra questions, here is the shirt's simple topology
