Those of us who knit shawls are used to those looser gauges, we want it because of the extra drape it creates in the fabric and we expect the fabric to behave in a certain way. With garments we have a different expectation which is usually for a more structured fabric.
Here's a sample of the type of garment I'm referring to:
If you want that style it's best to adjust your expectations.
Here's my tips on how to create and wear this type of garment.
Many oversized garments are knit with relatively fine yarns at a looser gauge, This because, when executed in light flowing fabrics, these garments hang from the shoulders and depend on collapsing against the body. The lines of your body need to be suggested in some way so that you don't look big and boxy.
A bouncy resilient wool might not be your best fibre choice for this. A soft merino may work and think about using alpaca, cashmere, silk or any blend of those fibres. Consider any non-wool yarns including silky synthetics.
You can see in the photo above how sheer this fingering weight merino sock weight yarn is when knit at a looser gauge. It also has more upper body shaping in the neckline and raglans than some of my other examples.
Here's an example which is sheer showing the shape of the body underneath.
Do note the difference in the way the garment hangs on a mannequin and how it sits on the body in the second photo. The decrease in fit means the garment shifts around on the body more. I like both of these but I know from experience no shoulder shaping often creates a garment which falls backwards at the front neckline. If that will annoy you, you should be aware of it.
In the example below the cardigan drapes around the body beautifully but may be likely to slip off of the shoulders. It's a pretty look but perhaps not for someone who doesn't like to fuss with their clothing. On the other hand since it's a cardigan the open front means the body lines can be seen and it looks small in relationship to the garment, which can be slimming on many women.
Think about the styling, going big over narrow is better on most women.
Exposing both your wrist and ankles can help to define proportions.
Be realistic about your body shape, remember what I said above about how the garment will collapse against the body. If you are very curvy think about where it will protrude on you.
These garments do often look best on taller or slimmer women especially if they have longer limbs. A curved upper back may be problematic as it will impact the way the garment hangs.
Do look at Ravelry projects on a variety of sizes and shapes to better understand how the garment works. Try to find any which are similar to your own proportions. If you do find some, assess the styling it might tell you how best to wear the garment yourself.