Hi TheGander, I think it sort of depends on what you're looking for in people watching, but for intimidatingly stylish woman of menopausal age, in and around Le Bon Marche is a pretty good bet, the Rose Bakery on the second floor seems to be their preferred gathering spot. Their somewhat flashier counterparts with a lot of international visitors mixed in tend to hang around George V, Avenue Montaigne, Avenue Mantignon (but will avoid Champs Elysees like the plague). Crudely, old money on the left, new on the right bank.
The students around La Sorbonne can be worthwhile, also a lot of younger interesting dressed folk around Etienne Marcel as Les Halles seems to be a gathering point for those who live on the outer edges of Paris and have a dress up to go into the city mentality, but in a creative way rather than formal sense. Canal St Martin tends to be more popular in spring summer.
Whatever big exhibit is on also tends to be a magnet for the well dressed. Whatever is heavily advertised in the metro is usually a solid bet, although they do usually require advance booking, so some anticipatory research might be in order.
In terms of shops, I'd recommenced going to AB33 (Rue Charlot) and French Trotters (Rue Vieille du Temple) in the Marais or Smallables (women's store on Rue Cherche Midi) on the left bank if you sort of want to go somewhere that's pre-curated but not a single brand store where everything works together and there's encouraging but honest staff. Sort of opposite of that, is Merci, which is always annoyingly crawling with tourists but they have a selection of clothes brands that might make you a bit overwhelmed when jammed in front of you on the racks but it's the place to find something that'll push you out of your comfort zone but really isn't that far out of it.
I assume you're already familiar with Soeur, Agnes B. and A.P.C. as that fits in neatly on the MH spectrum. If not, they have shops everywhere and tend to be in the major department stores. I'd recommend Lemaire as well but their flagship store is very menswear focused, I think their stand in Galleries Lafayette is better in terms of stock, but not so much atmosphere wise.