You can seem 1 foot shorter or taller and can appear heavier or lighter. You must adopt a form that has the same basic arrangement of limbs as you have. Otherwise, the extent of the illusion is up to you.
Every RPG group I have ever been with has used either a magic item or spell to make change purely for cosmetic reasons. This is true regardless of gender and how power gaming the group is. The Cloak of Billowing is a 5e item favorite and is usually requested at item creation or in the first magic shop. I do want to get Mask of Many Faces just for fancy dress on my next character now.
Does the 1 foot rule apply with or without the hat? I see potential for rules lawyering here.
If a Halfling wants to abuse this to 'hide inside an upside-down bucket' I think the Halfling deserves to become a bucket
Yeah, it's ambiguous. I interpret the "you can be one foot taller or shorter" to mean you, and something like a hat or ridiculous hair can just be as large as you like so long as it still looks like an item of clothing and not (say) a billboard.
Of course, at very large sizes, something's going to clip into the illusion every now and then, so it'll obviously be an illusion to anyone who is around it for more than a few minutes. I'm imagining small birds trying to land on it and faceplanting into your head.
