This thread has, unfortunately, attracted some classic MN comments and PPs who seem to enjoy being deliberately obtuse.
OP, I agree with you that 8YO and 12YO dressing in the way you describe (hot pants with bum cheeks visible and see through tops with bras showing) along with a full face of make up is not appropriate at all and is rather grotesque. Those PP saying "clothes don't put you in danger" etc are minimising the situation. Men/boys look at women and girls, a lot of men are decent and register that it is an inappropriately dressed child and think nothing of it and leave it at that, some men don't and still leer and stare too long or make inappropriate comments, boys are even worse for this because they have immaturity on their side and mates to play up in front of. I've read threads on MN about women being indignant (and quite rightly so) about the fact that builders/workmen/drunken louts jeer at them and catcall in the street when they are just walking about going about their business wearing modest clothing, what makes the naysayers think that these same groups of people won't be leering and making inappropriate comments to these girls?
I agree with the PP who say that dressing older/appearing older attracts attention of older boys AND girls and can lead to underage drinking, sex and drug use.
I also agree with PP who say that dressing like this is like wearing a sandwich board emblazoned with "My parents haven't set proper boundaries and leave me to my own devices too much, they don't pay enough attention to me/what I'm doing" basically advertising that they are easy targets for manipulation and vulnerable to predators.
Aside from the sinister sexualisation of children, it really isn't physically healthy for them to be dressing like this. Crop tops in cold weather can lead to kidney problems, not to mention colds and chills etc. Trowelling make up on isn't good for anyone's skin, let alone an 8YO's.
The skincare route may be a way in to discuss the make up with your SD, I doubt you'd make any headway banning make up, but maybe compromise and ask them not to use foundation and lipstick, just eye liner, mascara and tinted lip balm. You could talk about blocked pores leading to spotty, scarred skin, you could even go along the lines of "I know you want to look your best but there's foundation on the bedding/towels/furniture/your clothes and it's really hard to clean; you don't want your lovely outfits stained".
I don't have any new advice for the clothes, maybe you could look at fashions online together and discuss which styles you like, I don't know if there are any appropriate magazines to look through with them (is Look appropriate?! I have no idea)