I did a quick and rough edit to demonstrate what I'm talking about:
So, things to keep in mind when pixelling clothes. One would be that when something is tight, it tends to create horizontal folds. When something is loose, it creates vertical folds.
So first thing I did was look at where the tight folds would lie. The top of her dress seems tight, so the area between her breasts would have some horizontal folding. The area along her waist also seems tight, so I added some in there.
Now, you could add some straight up and down folds for her skirt, but there are two problems with that. It doesn't take into account the shape of her body beneath the skirt, and it doesn't add movement (since you felt the skirt wasn't flowy enough).
I changed the shape of the hem because it lined up perfectly with her legs, and along with the shadow, made it look like she was wearing shorts.
With the folds on the actual skirt, I started them along the side of her waist, because that is where the body curves and catches a lot of fabric. I had the folds go diagonally down her body to add some movement to the dress.
If you want to make it more flowy, you can add more folds, but with a piece this small it might make it more difficult to read.
Another thing I did was remove the highlight color. That depends on the fabric more than anything, but most fabrics aren't shiny, and I personally feel you'd be served better by either choosing a color for AA or skipping that altogether. If you do want to use a highlight, make sure it flows with the fabric instead of just sitting along a side of the piece. I'd also mess with the color a bit, as it's very similar to your skin shadow color.
