Everybody goes out and stomps down the divots made by the horses. People toss balls around or hit balls with small mallets. The kids love it.
For most people the whole getting dressed up thing is just a myth. You should wear whatever is comfortable. It's not like you're going to a private yacht club. I'd say the outfit of choice is shorts, a T-shirt and a hat to block the sun.
You should spend some time watching one player. Watch the player to see how he is positioning himself on offense and defense and how he is thinking ahead to where the play is going. That will give you a bit of a different perspective on the game.