Remember when TS4 was first announced? IIRC, there were videos showing the new tech with pants/boots and ball gown type clothing. Pants were supposed to automatically tuck into boots and, if a Sim were wearing a mesh with an exceptionally wide skirt, the hands were supposed to stand out more from the body so that the Sims wouldn't always look like they had their hands in their pockets.
I haven't tested the ball gown thing, but I know that the pants/boots works. Perhaps that same tech can be used to adjust the dance animation slightly if a Sim is larger than a certain parameter in belly and bust size? For larger Sims the space between Sims could be adjusted somewhat.
Hopefully, that made sense.