A:  Excellent questions both!  To which I offer the following answers and examples.

First, the Why.  Everyone needs in their closet the "instant elegant outfit."  Something you can put on and never have to question how nice you look.  Because this outfit must be appropriate for all occasions it has to be a versatile.  Versatile is easiest when it's in the form of a neutral base that can be accessorized a million different ways.  Black is universally flattering - every woman in the world can wear it in some way or another and look lovely.  It's the perfect backdrop to anything you'd like to do with it.  And no, it doesn't have to be "little". 

Coco Chanel created the LBD (little black dress) around 1926, officially premiering it in Vogue that year.  Her design was only "little" in the sense of "simple".  It was actually very modest - calf length, long sleeved and trim fitting but not skin tight, with virtually no embellishment.  Until that point, all-black clothing was mainly reserved for funerals and periods of mourning.  It tended to be long and stuffy.  Her simple design, dubbed "Chanel's Ford" because it was versatile and intended for every woman, like the Model T for every driver, was simultaneously a revolution and instant classic.


It's nearly impossible to find pictures of Coco wearing the dress, but I found the one above that someone took with a stuffed monkey.

Second, the Personalization.  In answer to your other question, I offer the many examples below.  (Click the images to enlarge.)  The LBD you choose should a) speak to your social life and b) reflect your personal taste.  For example, if your social life consists of lots of fancy dinner parties with your husband's company and clients AND you like a dash of retro, you might choose something like the dress on the far right below.

If your social engagements tend to be more casual (dinner here and there, a movie, but maybe the ballet occasionally) and you like something sleek you might choose one of the short sleeved options below, or the wrap dress on the right.  

You can find everything from a vintage party dress to something very avant garde.  Embellished to the hilt or a blank canvas.  Personally, I think Coco had it right.  The more simple the dress, the more versatile it is.  You can throw a colored cardigan over a simple jersey LBD, add some flats and head out to run errands.  Swap the cardigan for sparkly accessories and the flats for heels and you're good to go for date night. I have two in my closet. A simple matte jersey wrap dress that gets the most use, and a fancier, layered chiffon dress for really special events.

If you noticed, I offered up only modest options.  And I wanted to showcase a few below from Shabby Apple.  For being a small boutique shop, their selection of LBD's is nicely varied to fit many tastes.  And all are modest without you having to modify.

So yes, whether it sweeps the floor in satin drama... or kisses the ground with bohemian relaxation, you need one of these dresses.  Take your time. (You didn't have it yesterday so you don't need it tomorrow.)  Enjoy the process. (Your perfect LBD match is out there!)  Buy the best you can afford. (This is most definitely an investment item!)
  And once you have it - WEAR IT! Wear it often, wear it well.