Here are the final renders. I made two, one day and one night version.
http://youtu.be/l8-S_Y82dyshttp://youtu.be/oQZL8pYiTXsFinally, this was done with the real mesh, and a cloth modifier on the hair.
The clothes were not edited any more than the obvious stuff: colors were swapped in the red T-shirt, the jeans were cut off, and masks were added for clothes that didn't have any. I should have moved the bottom of the T-shirts outside the jeans, but in the end I lacked the energy to do so.
The hair was trickier. I went for short hairstyles because long hair tends to penetrate the body. However, it is not possible to just cut off long hair, because then the strands would end in the middle instead of fading out, which looks weird. So I had to shorten the hair by moving the verts in the tresses up.
In the final render a cloth modifier was added to the hair. Here I found that it was useful to load MakeClothes to get the button that removes all vertex groups. All verts belong to the DfmHead group at 100%. In addition I added a Skull group which affects the pinning of the cloth modifier. Even the verts at the bottom are pinned to some degree, to prevent hair movement to go out of control. This is important because collision detection is turned off. Collision detection takes forever in Blender
Another thing that I noticed was that the mesh is very heavy inside the mouth. When I removed these verts, render time went down from 16 to 10 secs/frame. In contrast, removing the verts beneath the clothes was hardly worth the effort.