clean and casual, that's my vote!
I have flown with many schools, both commercial and non-commercial, both in the USA and in Germany, and NO WHERE did the instructors wear ties!! Did I think them less professional? no!
Flying is also a "dirty" business... do a proper outside check and get your pretty white shirt all filthy... no thanks.
And as for the students... they should be informed BEFORE their first lesson, that they should wear comfortable shoes, even sneakers if need be, and comfortable clothes!! emphasising COMFORTABLE!
I sometimes visit my school during my free time, dressed in nice shirt or blouse and jeans, then get asked by the school to jump in and take over a training flight or something. No need to drive home to change!
So, that's my opinion and, btw, even our people in our CAA don't run around in shirts and ties
(but yes, they do wear clothes heehee)
Westy