They may have brought 7 in as a sex symbol but the character became far more than that thanks to the writing and excellent acting. People who only see a catsuit and big breasts aren't watching the show IMHO. I found her journey much more interesting than Data or the Doctor, for one thing neither of them were someone you felt incredible sympathy for. They were created, they wished to exceed their programming. 7 had her life stolen from her in childhood and yet she also had an incredible life given to her in that loss. She never loses sight of that and this is one thing that makes her struggles interesting. It would have been easy to make her hate everything Borg but she has tasted perfection. She may no longer wish to be a slave but she keeps her slave name because finds strength in that identity, even as she moves beyond it.
My in universe explanation of the catsuit is that 7 is used to being completely encased as a borg. Loose fitting fabric is both inefficient and discomforting to her, she does not wish to think about clothing or adjust it. To wear a catsuit is to feel safely held together.