Hugs Hun, you really are having a rough time right now aren't you? How do you want to play this, in terms of which one to sort out first? I think dealing with both at the same time might be quite rough, but it's up to you. Maybe DH could tackle DD2 and you DD1?
So a few thoughts, I hope some will help. I have a spirited nearly 4yo so many of your battles sound familiar
If she's only recently dropped the nap do you think it's worth throwing in some earlier bedtimes? Disturbed nights and no nap at this age would I expect almost certainly cause OT build-up. Even just a one-off every now and again?
Second do you use a gro-clock or similar? I think it really helps to have a 'third party' reinforcing night time, not just mummy or daddy.
When she wakes screaming, when in the night does it happen? First 2-3h after bedtime is typical for night terrors, later than that I'd think OT wake-ups or possibly related to waking and not finding you there? Could you perhaps change up her BT routine so stories happen a touch earlier or in another room then she gets into bed awake and falls asleep alone? Has she gone to sleep independently in the past? If so then you could use WIWO if needed, or reassurance from outside the room, or combine with silent return to bed (I'd suggest that for the NWs). If she has never slept independently then you could use GW (or also if you think that would suit her better than WIWO which does wind some kids up).
Re the clothing battles.....I'd do your best not to make it a battle. Give her total control over what she wears. Offer help getting dressed if necessary but let her choose. My only rule is it has to be decent or weather-appropriate, so for example I wouldn't let her go out in snow in only a t-shirt, but if she wants a party dress to nursery or to wear scruffy leggings to a party I just go with it. Anything I really don't want her to wear I put away. With these spirited girls I really do think it helps giving them as much control or choice as possible, only really insisting on the dangerous, destructive or disrespectful things. I find if I am totally honest with myself that 9 times out of 10 the battles I get into with DD are over things that don't *really* matter. And those battles are most likely to happen when I'm tired....am sure you can relate
Anyhow, here with hugs and support, or just to bounce ideas off xx