i'm with you on this one inspire - see one of my posts about starting again after injury+weight gain. Basically i've done the lycra thing...yes, its comfy, practical but i'm just not going to wear it anymore, even if MTB stuff does make me slower than i could be. I wear 3/4 length MTB shorts (they have detcahable inner shorts with a good pad), and generally gear you'd see on a mountin biker.
I do use arm and leg warmers for our awkward changeABLE WEATHER. and those long legged bibs are great in winter, whatever else you wear.
as for 'flapping in the wind', well the tops in particular are so light that i've never noticed much of an issue.
the folks on here who encourage 'the right gear' - well, they are technically right in their descriptions and hats off to them for being so dedicated, but cycling for me is about escape and relaxation and sanity away from all the drudgery and conventions and doing things 'the proper way' - its freedom. So i'm not joining the gang, i'm not conforming, and i'll never be thin again-can't be bothered to maintain that level of hard work - i'll live with the 'disadvantages' of looser clothing - its all bike specific and comfortable anyway.
I hope i dont sound confrontational - as I say I respect the 'proper', dedicated and superfit cyclists, i really do, but I didnt get into this to get into another variation on 'keeping up with the jones'.
I will agree that you should NOT be self conscious about lycra - get out there with a 'dont give a f**k' ATTITUDE, youre the one on the bike and not sitting around eating pies after all - and as i say i've done it, I have the lycra but on balance i've found my 'niche' and my level of 'pleasure/effort ratio' and i feel good in the MTB style stuff, it feels like 'me'
(i ride a hybrid BTW, never had a mountain bike)
cycling is about freedom and enjoyment - do it however it feels right for you. try both - mix it all up !