For years, I have avoided shorts like the Bubonic Plague: partly it had to do with my conservative side, partly it had to do with my not liking my legs (in retrospect, I realize I was crazy), and partly it had to do with the casual quality of the garment (believe it or not, I did not wear jeans in college). Unlike most who are under-dressed, I have often found myself over-dressed. However, recently, I've decided to indulge in a more casual summer attire, and shorts seem like a must-have on hot, sweaty days (today was an apt reminder of how humid it gets in the city).
Gladiators, wedges, or low-heeled pumps work with this look, but peep-toes, stilettoes, or ballerina flats may appear either too sexy or dowdy (ballerina flats work with short shorts or leggy girls). I'd avoid a tee-shirt and replace it with a pretty, simple cotton blouse (perhaps one from Anthropologie).
As for fabric, I'd choose cotton (breathable) or denim (durable), and avoid linen (too easily wrinkled), satin or silk (too precious), and terry (too beachy). While I don't flinch when it comes to expensive pretty dresses and skirts, I do prefer saving some pennies when it comes to shorts. We all need some cheap, durable choices for hot barbecue, picnic, beach, or amusement park days.