In the past, I would have gone "back to school" shopping with my kiddos, but not this year. I was able to get some great stuff for five bucks at a local yard sale for one of my daughters--although she still needs shoes. My oldest will need some jeans, but I have better luck finding things that will fit her at Value Village than the department store. My 2nd daughter needed a coat and thankfully I got a decent one at Costco (a boy's style, but she didn't mind) for only $20. The older two got new (clearanced) sneakers over the summer. The oldest got new bras and underwear. Other than school supplies, that's pretty much the extent of our school shopping.
In my town there are two good sources of FREE clothing. One is a local church with a clothing bank. They have tons of stuff and anyone is welcome to come choose a certain number of items they need, regardless of income. The other is a city-funded Family Center that gives out coats, clothes and school supplies but is income-based; you have to be a registered low-income family with them to get in. They do free halloween costumes and such too.
Otherwise I suggest emailing some friends and getting together for a clothing exchange. Bring what your kids have grown out of and swap with others; donate everything that's left over. We have family friends with older kids who regularly drop off bags of stuff on our doorstep. I don't mind that at all! My kids think it's great and see the value in being thrifty and saving their dollars for more exciting things than clothing. Most kids in our area don't dress really nice for school anyhow--always jeans, jeans, jeans and t-shirts. Maybe in 8th grade and up they start to notice labels, but only if they are really shallow will they even mention it.

My kids have definite expectations from me about what is important--even if we had endless gobs of money I still wouldn't let them walk around in all-new fashion-plate wardrobes--so they don't really aspire to that kind of thing. Fortunately for us, their friends and their families seem to think likewise.
Mismatched clothes: boys rarely care or notice unless it is really strikingly unusual. There was a boy I knew who insisted on wearing button-down shirts and bow-ties all through early elementary. He stood out more than kids wearing mismatched colors. Girls tend to start noticing clothing differences sometime in later elementary I think. I have sometimes redirected my kids into different clothings choices if I thought it was possible they'd be teased about it. It just depends on the kid and the moment. My oldest is definitely interested in the "rules" of fashion (how to accessorize, what kinds of clothes are appropriate for summer vs winter, etc) so occasionally I try to build on that.
As for free lunch, we haven't been down that path yet, so I can't say what kind of stigma there might be. I think it depends on how the lunch room is run--whether there's a list of free lunch kids that is check off or whether they have prepaid meal cards, etc. At the local elementary more than half the kids buy lunch on any day only some of which are free/reduced cost lunch. I don't think most kids notice.