You don't have to dress up and you won't be out of place if you don't. If you want to dress up, go for it! One of the really fun things about MNSSHP is seeing all the dressed up adults. It is such a party atmosphere and everyone is a kid again. You also don't have to go all out if you do decide to dress up. My DH wears a superhero T-shirt with his regular shorts.
This is very true. The Trick or Treating is not a priority for us. DD isn't huge on candy and we typically leave any leftover MNSSHP candy in the room and don't cart it home on the plane from WDW, so we never get in those lines early in the evening. Towards the end of the night as we pass by the trick or treat areas, she will jump through a few. I don't think we have ever waited in line. She just walks right through and gets candy.