For instance, why do they wear their particular clothes to celebrate social/religious occasions? There are three reasons why they would show up in drag to a social or religious ceremony. Some of them view themselves as berdache, a duality of both the masculine and the feminine. Although the term refers to one particular indigenous Native American culture, many cultures hold similar view that there are those with both male and female spirits. In the simplest terms this means that any ceremony they perform or are a part of is twice blessed. Others view themselves as political and social animals. This means that the persona is often more important to be present than they are. For example, there are things that George Bush has to show up at as Mr. President George Bush, Commander and Chief. Other times he must present himself as George Bush the Business Man. The mask he wears must fit the occasion. The same rules apply in the drag world- if a friend of mine would show up as Jason to a Pride Festival rather than as his personae, Lady B. it would be an insult to many participants who view "B" as a spokesperson and an icon. Meanwhile if he were to show up at my potential graduation as "B.," it would be an insult to me- since I am friends with Jason and not "B." Ultimately, they are both the same person, but they are reflected by different apparel. Some drag queens also view it as a social prerogative to show up in costume, they feel more attractive and important in their finery. As a result at many functions of a social/religious order you would be surprised who in the community will show up in their costume and who will not, and that many of them may not enjoy being in that clothing and may even be extremely uncomfortable.
They then also visibly identify themselves within a group. There are two ways that this happens. One of the fundamental ways is that despite many efforts, drag queens will separate themselves from looking like real women. Whether it is through exaggeration of form- oversized earring, hair, shoes, and other accoutrements- to smaller differences such as the heavy foundation and different styles of dress. A drag queen is allowed to wear her outfit much like a costume, changing time periods and regions outside the acceptable "retro" age or through the materials chosen to make the outfit from. There are also ways that they distinguish between individual groups. For example, you will may find some people wearing clothes with designer labels, preferably "Channel," (or at least a reasonable knock-off). Still others might choose to wear unnatural looking wigs, and extreme color choices. It is not to distinguish one as superior or inferior- it is simply a way of showcasing what those within the sub-groupings value. The overdressed turbo-haired diva is hardly going to damage a nail, meanwhile the one without a wig and with unpainted nails knows that they are the most likely person to have to climb a ladder if a bulb burns out before a performance. They can also use their appearance to show status within their group. The easiest way that they accomplish this goal is through the use of jewelry. One might even go so far as to wearing a brooch, which serves as a nametag for their accepted or self-perceived position. Another way to tell their status is often through the height of tiaras or crowns they might wear. They actually adhere to strict codes for what size you are allowed to wear that are recorded as part of protocol- a socially accepted uniform ranking system per se.
Do they wear their clothing to attract persons of one's gender preference? According to just about every drag queen I talk to it appears to do nothing to attract their gender preference. Most of the drag queen are gay men who are attracted to gay men. Dressing in drag only seems to attract confused lesbians and straight men. This does very little to help the drag queen in her search for a mate The primary message drag queens seem to give off is a confusion of gender identity. The only time where this is attractive to their gender preference is when they find a mate who is actually attracted to them as they are- between the worlds. The regalia are typically worn for display of self-efficacy. This may indeed attract desired partners, but it is the self-conception that is more attractive than the actual clothing (though good clothes do make the man, so to speak).
Do they still express individual taste? Definitely so. Some of the culture revolves around that very principle. You will often find a queen finding a diva to idolize, whether it is Brittany Spears, Marilyn Monroe, or Margaret Dumont. Often they will get the same dress as worn by that performer, or make one from scratch. There is always an individual flair to it however. The glorious purple and white pin stripe suit from Titanic becomes larger that life and is soaking wet. You will find performers like RuPaul who want nothing more that to look, sound, and act like a white blond Barbie despite their African-American heritage, and you may find the opposite extreme with a little white boy wanting nothing more than to be Koko Taylor.
I had my friend Jason/Lady Agusta von Braknell assist me with this, so if it sounds a little personal at times know that I am being helped by someone who's biased.