I'd like to also suggest on top of the "good" suggestions of everyone else when the dog is nipping and grabbing the clothes: is to NOT pull back. To just FREEZE- stop moving, then give your verbal corrections then remove the clothing from the dogs mouth by putting the gentle pressure there at the corner of the back of the mouth until they open. If it is a towel or balnket do the same thing. Mine does this when I am drying him off and he gets excited, and I just stop drying, tightly grip the towel now give the verbal correction of "drop it" and he will spit out the towel.
Sometimes he will get froggy and grab my pants in play, and I stop play and say "drop it" he spits out my pant leg. He unfortunately learned the pant leg thing from my boxer though. Same thing can be done with long sleeved shirt.
If you pull away from the dog you are showing them that you are trying to play a "tug" game with them. Just stop moving and then teach them the "drop it" command.