Why should I wear bicycle clothes made of spandex? What's the reason for wearing biking clothes made of Spandex (Lycra)? They sure look pretty strange.
I thought spandex shorts looked weird too, until my wife bought me a pair with the padding. Now, I can't ride in regular shorts at all!

The shorts with padding help protect your sensitive groin parts, as well help keep you cooler and drier (preventing nasty sores) by wicking the moisture (sweat) away from your body. There's no binding or rubbing in the wrong areas, and all your jiggly parts are held securely in place. 

And a big, important point about bike shorts - you wear them without underwear. 

Jerseys also come in tight and loose fitting material - I personally prefer the loose-fitting jerseys (I'm not exactly skinny enough to wear the tight jerseys). Other than the moisture-wicking they provide, they also come in extremely visible colors, which is nice when you're out riding by yourself, especially if visibility is low.