you know what saree is the most sexiest dress in the world.
No it isn't, its just the way we determine ourselves to wear it.

If a person wear saree with a deep neck blouse and wore the saree in a way to exposed her belly . will you call her traditional woman? The answer is definitely NO.
so you can't judge a person's tradition by their dress.
In my opinion we can dress modern or traditional as long as we keep our decency and self discipline in act.
True your last point is strong and Nice