Why were people dressed the way they were during the Elizabethan era?

Your question does not suggest any particular answer. Times change, fashions change, people change, sometimes people want to show off wealth, and sometimes people just want something different.

For example, a king once slashed his shirt sleeves and stuffed cloth of contrasting colors into the slashes because he wanted to appeal to his subjects who often wore rags. His courtiers promptly instructed their tailors to make clothing with contrasting colored fabrics sewed in, contradicting the spirit of the movement. Bonkers, but that was the fashion for a while.