I think tznius is very important, and I wish boys would make it more of a priority in shidduchim. Maybe that would encourage girls to dress more tzniusly. After all, the reason why girls don’t dress tzniusly is because of peer pressure and caring how people think of them. If boys would prefer to go out with girls who dress tzniusly, then the peer pressure would work the other way and the girls would WAMT to dress tzniusly. At least, that’s what I would think.
And yes, I think that dressing tzniusly can be an indicator of Yiras Shamayim, even more than learning is. Someone can easily learn Torah and still be lacking Yiras Shamayim. He might learn because he enjoys it or it makes him look good and feel good about himself. But dressing tzniusly is something that usually takes a certain amount of Yiras Shamayim since most girls find it hard to some extent (some find it very hard). Also, the peer pressure for girls is often to NOT dress tzniusly, whereas for boys, the peer pressure is to YES learn.
Tznius is not about outer appearance. It’s an indication of what is going on inside the person. A girl dresses tzniusly precisely because she realizes it’s her pnimius (inner self) that is important and not her chitzonius (outer appearance).