It's wonderful that you're honoring your mom this way. I know people who care a lot about clothing, and they'd totally love it if they looked down from heaven and everyone was dressed to the 9s! You're a very thoughtful daughter! Your mom was so lucky to have such a thoughtful daughter, you, who cares about details of clothing because they were important to your mom. If only there were more people like you in the world! PS, sorry for your loss; my parents are in their 70s and I know it's rough!
The Wave Kids at Golf Mill Mall has good formalwear and there's a fantastic holiday sale on right now with like 50% off and stuff. Definitely worth a look. They have the best formalwear for boys too, should anyone you know care.
Beyond that, Janie and Jack has good clothes for what you're looking for, but they're expensive; maybe if you hit the holiday sale it won't be too bad.
Try The Gap Kids. There's one in Old Orchard Shopping Mall and I think there are a bunch elsewhere. Gap sometimes has formalwear and now you can get the after-Christmas sales. They might have something in deep green or crimson which won't be too bright for a funeral. (Though I'm sure a little bright on a 2 year old won't be a big deal)
Or try Nordstrom Rack! The Rack is like an outlet store and with after-holiday sales as well it'll be awesome!