What people have been missing a good explanation of is that some schools can't wear certain types of armour.
Most arcane classes can only wear cloth armours, mage being one of those classes. This is why you cannot wear anything better than cloth, and as you said, it's a matter of getting the best cloth for mages.
Also, even mages must take a school like warrior ( ) - that gets 10 armour use per level - because they cannot wear their best armour otherwsie. (i recall mages got..8 or 7 maybe? armour use per level. Which ends us below 910 skill so they are limited to lv80 or lv71 armour with that class alone)