It's a console screen and cloth physics are pretty memory intensive. As for the hair, in the PC version they may have hair transparency to make it look more real like that in FF XIII. If not, I'll work on the hair and try to get a realistic hair mod out for everyone.
Edit: Also, the hair bending like that is just mesh folding, it's typical of meshes when the skeleton bends in a certain way.
Yeah, it's console, not like console games like Assassin's creed, red dead redemption or any other ones with vast open area's used physics on cloth or hair or anything...
It is ENTIRELY possible to use physics on cloth. They could even have it be a thing done solely on the player character or only things near to him in a cone (so it uses it only on nearby things you see, rather then things out of sight or far away).
With the use of HAvok in the game it just makes no sense for the next TES game to not have a basic thing that MANY many games use these days.