There are no rules but you don’t want to look silly. I’ve been to weddings where the OOT girls really stuck out because of the clothes they were wearing. I suggest bringing a variety and getting ready at a “in town” friend’s house to see what the type is.
I think heels are a necessity unless you’re really tall. I tend to kick mine off once the dancing starts getting more intense, but I would never wear flats to a wedding.
About top/skirt or dresses- really depends the type. I think more people are wearing fancy skirts and simpler (but still nice) tops these days, but I still see fancy top and nice skirt, and short dresses.
As Torah613 said, there are no rules, but if you don’t want to stick out, maybe find out what the type is…