Hmm. First off, depends on what one would call dressing up. Dressing up for me involves a lot less cotton shirts and light blue jeans, no sneakers, more attention on my hair, using the iron etc.. Depending on the church one attends, you'd see some different dress codes. At denominational churches, the majority of folks seem to be "dressed up". That is, men are in buttoned shirts, maybe a tie and non-sport looking shoes. While the women are often in dresses or blouses and skirts. I figure folks have their reasoning for it. Maybe to fit in, because they like "dressing-up", other reasons besides focusing on God, or most probably because they view attending church as a special occasion. Non-denominational churches I've noticed the attire to be very mixed.
For me personally, doesn't really matter. I try to go with modest and attractive on all occasions. Modest IMO involves covering the body well so as to avoid extra emphasis on the silhouette/nakedness of the body.
Take a Christian female; IMO it's best that her legs are covered on all outdoor occasions. I know men that are highly motivated by the female legs. I think it's our job to deter the motivation. Arms should be covered up to the elbows or at least half the bicep area. Cleavage is for the husbands eyes only, that should go without saying. Whenever close fitting pants are worn, the female should make it her business to wear a longer blouse so as to cover the back side area.
I personally don't have any problem with makeup, as long as it's worn in a manner that still appears natural. I believe in personal hygiene and keeping fit and as a female I take care of my eye brows, teeth etc. I realize that I am way off topic now, but yea, can't sum all this off into a one liner.
To answer your question, I don't think it matters if we dress up or not. However we dress, our focus is to be on God.
God bless.