Simple answer is yes they did - to what point they did all depends on the ubiquitous who, when, and where.........
Harness spots have been around a long time and were used on cowboy gear at least as far back as the later 1860's - this is documented, but they really became popular in the late 1880's and later.
While the normal resources such as Packing Iron and Cowboys & Trappings of the Old West are very valuable, they represent actually a quite small database to work from. To add to one's documentation, look not only at the photos of the period - offered in many different books and from different areas - but also museums and their websites, auction house websites and catalogs, magazine articles, and even private collections can often be viewed when asked politely - Rick Backman for instance has a collection of several thousand pieces and the Gunfighters and Cowboys Museum in Colorado was once a private collection. Also keep on top of the current offerings, join the Nat'l Cowboy Hall of Fame for instance and again keep an eye on western auction sites such as Cowans, Greg Martin, Butterfields, and Gary Hendershott as well as antique cowboy gear sites.
As to whether one wore fancy gear or not also depended on where one was from and often under what conditions one worked with. Texas cowboys from the brush country for instance tended to be less fancy since the conditions weren't conducive to wearing fancy gear, even with the Spanish influence. On the other hand the California cowpokes tended to be much fancier, since much of the cow country was open plains and rolling hill country and again a very with a very strong Spanish influence - actually almost all cowboy gear and the decoration used is based on Spanish gear and that goes back even to the earlier era of the 1820-30's.
On the Great Plains open grass country you get a mix of Texas along with some eastern/English influences in horse gear. Then you get a real mix of styles which became the buckaroo look in places like Montana, Wyoming, and the Great Basin where all types wound up mixing and matching gear. By the late 1870's you also start seeing the influence on cowboy gear due to the Wild West shows, which just like Hollywood made an impact, but even before that dime novels, etc. had an impact on the fashions worn by the men and women of the west.
As to the cowboys being plain working men using the cheaper gear - in general no - both the conditions they worked in as well as peer pressure played a big part in the gear they used. There is no doubt that some cowboys wore the cheaper gear but in general cowboys were the type who put a $40.00 saddle on a $10.00 horse and the rest of the gear was commensurate with that attitude. Cheap thin catalog holsters seldom held up to the rigors of working cattle in teh west and were commonly looked down upon and called chicken skin rigs. Hats, by far Stetson had the quality they wanted and good boots were a necessity - be it by need or fashion (Teddy Blue Abbott was so self conscious about his cheap rough farm boots he ruined them so he wouldn't have to be seen in them). Blue jeans aka dungarees, were pre-1900 considered farmer cloths - cowboys wore good wool britches generally. Like horsemen throughout the ages, the working cowhands of the late 1800's considered themselves a step or three above the rest of the humans, even if they often didn't have a pot to pee in, but their gear ws more often than not top of the line or at least the best they could afford.
Back when I worked as a cowhand in ranches in So California, in the late 1960's and early 1970's, most working cowhands I worked with wouldn't think of buying anything less than a good custom saddle from Visalia, Hamley, or others, Paul Bond Boots were and still are considered top of the line by many - other brands were worn, but almost all were handmade and not off the rack Acme's or other catalog brands except maybe when mucking out stalls or such ground work, and gun gear came from either places like the previous mentioned saddleries or shops like George Lawrence or El Paso. And from the working cowhands I know today here in the SW and the Great Basin, most are still the same - although I know a few who wear farmer caps and running shoes because they don't want to get mistaken for a truck driver or C&W singer........
Appearances then and now still count for something amongst caballeros of all types - especially when they're young, tough, and full of the ole pee and vee........
As for women's hairdos I've always liked the Gibson girl look and also like longer skirts - a quick peek of a well tuned ankle still makes this ole hivernant's heart flutter .......and put a woman in a bucksin skirt and outfit or even better an Indian dress and I be as happy as a man can be - mystique has it's own charm... for the rest well as Charlie Rich sang - I prefer it behind closed doors.........