Well, I have to say I love the line about "Christmas gone wrong"!!
The first thing I would do is tell your husband you are taking 2 days this month or in the next 3 weeks to go spend some thought and time on yourself. Find a Saturday or Sunday, tell him you are leaving at 9 AM and not coming home until 4 PM or maybe 5, and you hope he has a great day with the kids. Then leave. Browse - don't just go with lightning speed, throwing any old thing off the rack into your cart. Take the full 8 pieces into the dressing room, mix & match. After a few hours, take yourself to lunch with a trashy novel or a magazine, and have a glass of wine while you order something you'd never make at home. Go to a restaurant that doesn't cater to children and even to a place your husband doesn't like but you've been wanting to try. After a relaxing lunch, go out for Round 2. The first day you go out, don't have a goal to actually purchase a lot. If you find it, great. But just get used to being by yourself with leisure time, and trying on a bunch of different looks. On the second Saturday, go to some new stores and try a few that are worth a re-visit. Take the first purchases into the subsequent stores so you can mix & match.
If you have success buying on line, great. But I don't do well that way, and I also don't think you can judge the quality of the fabrics (so they stand up in the wash) and I don't think you can judge the fit.
I'd have thought Old Navy clothes would hold up better than they have in your experience. One thing I do is wash pretty much everything on "gentle" or "delicate", and I don't wash every time I wear it. I also line-dry what I can, especially bras and panties. I think you can get good buys at Marshall's (do you have those where you are?) but you have to be willing to walk in and walk out if they don't have what you want. Their merchandise changes regularly so a visit a week later will show new things.
I always shop sales and look for those coupons that come in the mail. They can be a good incentive.
For a look, I'd go with comfort. Are these really "house clothes" or are you expecting to go out, do errands, and have people into your house (e.g. business partner)? I think stretchy pants are great for moms who have a few pounds they're trying to lose, and especially around the holidays when you're maybe consuming an extra calorie or 2. I prefer shirts that aren't tucked in, so stretchy pants work great with sweaters, long shirts, or layers. I think you can change up a pair of neutral pants and throw on shirts from casual to moderately dressy, to change it up. Some women really like layers so they wear a long shirt underneath and throw on a second top that's shorter. Don't know if that works for your body type.
I also think a good pair of jeans is a great investment. I think it's easiest to shop in a store with a lot of different styles and leg cuts so you don't have to keep finding a new brand. Once you find what works, buy 2 pairs (maybe a blue and a black), and then you can just replace easily as needed. I only wash jeans about every 4 wearings so they hold up longer. I've heard a lot of people say that having a tailor alter your jeans is a great investment. I've never done it but you can consider it.
The other thing I do when I'm going to be getting up before my husband is put the day's clothes either on the dresser in a pile, or in the bathroom. It's impossible to tell black socks from navy in the dark, and the less opening and closing of drawers in the wee hours, the better. I also keep a pair of low boots or slip-on shoes right by the door. If I have to take the trash out or walk the dog, it's much easier than tying on sneakers or going back upstairs for something.