Methen, the suede skirt should give you lots of options. It really is a versatile colour, I like it a lot with the colours already mentioned but other hues of blue work really well, like a bright sky blue, denim shirts work really well. Ochre and orange work well too for the full-on seventies feel. For below I'd say ankle boots too, you can also do brown opaques and brown ankle boots if you have them.
Think the Jaeger cashmere knit can work with it too. Have you tried unshrinking it with conditioner already? Not sure what you mean with pockets would be covered, on the trousers or are there pockets on the jumper that I can't see?
Sorry, not a fan of the Micheal Kors, it does feel dated but it's more what it does for you proportionally, maybe it's the bum covering length? It's also somewhat counter to the current silhouettes which are more waist centric and bottom heavy. I'm not sure what I'd pair it with, could you still move your arms if it were tucked in? Possibly some more dramatic wide legs in a heritage fabric in the brown family would work if it could be tucked in?
Is the bow fixed or can you have a play with it? I do like it, but agree the bow needs a bit of altering not to overwhelm you, as for the view in, would a lace camisole work underneath?