These are both fiendishly complicated sentences to use as an example of past continuous; I understand why you are confused.
The first sentence uses past continuous, indicating that you wore the same thing for the duration of the party.
What were you wearing at the party?
Past simple is also valid, with the same overall meaning, as the party is over (completed action):
What did you wear at the party?
For the second example, it does make a difference whether you use the PS or PC:
They were not doing much business after lunch
Past continuous means that, in the period immediately after lunch, they did not do much business.
They did not do much business after lunch
Past simple conveys the idea of a completed action in the past. It's not lunch, because it says after lunch, so we must assume that it's the end of the working day. This sentence therefore means that they did not do much business for the rest of the working day.