CAS mesh morph issue

Hi. I assume you appended the same mesh twice, the suit is missing
Anyway, you forgot to scale your uvs in the uv_1 map. Press A to select everything, S X 2, G X -128
You also need to delete everything that is hidden by the sweater, it does nothing but increase the polycount and slow down the loading process. Select everything in 3d view, in uv editor enable sync, holding Ctrl, select everything that is covered by the sweater, press Delete in 3d view, choose faces

Also, any skirt-like bottom should be vertex-painted differently

The uv_1 dictates how the mesh will deform during body customisation is CAS. Vertex paint dictates what variation(s) of deformation maps the the mesh will use.

1). First thing first, clothing with loose sleeves, chest and armpit areas should be made with arms down, not up as in the default pose. If you want to get rid of these issues, watch this

2). Polycount. More polygons = longer loading time both in s4s and the game. NEVER export md's props ( buttons, fasteners, etc) or leave them unedited, they are very highpoly. Ideally, you would want to retopologize clothing. Not only will it reduce the polycount but also improve the way mesh deforms during animation or body customization. The fastest way of doing it would be in zbrush, it can be done in Blender, too
3). when making anything with skirt-like bottom, start package and transfer weights from an item that has skirt bones. If you import a blend with skirt bones into a package that does not have them, the mesh may distort in-game for you or someone else. So use the dress i'm using as a reference and a base for your package;
4). 5 key - switch between orthographic and perspective views, 1 key - front, 3 key - side, 7 - top, 9 - the opposite of the current view;
5). Alt - M - merge menu, Delete key - delete menu;
6). when creating new geometry ( like when you close holes ), make sure to unwrap it. If it will not be visible, you can scale down the uv island significantly. By unwrapping it you will also make sure s4s splits the mesh along the border of uv islands and prevent the dark shadow from appearing along it. However, you will still need to split it before baking textures or mark it as sharp;
7). For Draw other objects feature to work, both meshes must be selected and have the same texture set as the background;
8). Before transferring vertices, make sure nothing is split by removing doubles. Even if vertices have the same coordinates, they may get different values. You can mark seams as sharp, select and split them later ( 0:14-0:40 )
9). make sure every meshgroup you use as a reference or source object is visible;
10). don't forget to use Clean tool after transferring weights;
11). the uv_1 map i got is not perfect. For it to be perfect, there has to be an edge loop(s) along the seam of the body (0:28 - 2:30 ) ;
12). uv islands of the same item of clothing should be scaled uniformly. Things like buttons, lace, zipper, etc, can be bigger for extra definition, while hidden or obscured parts can be smaller;