I sleep on my side, arm under my pillows. Yeah, I sleep on top of multiple pillows. I wake up with neck pain on occasion, but is is just more comfortable for me.
As for clothing, when I am at college, I am sleeping in a room that is a bit too hot so generally in boxers and a t-shirt. When I am at my parents house, my mother sets the heat very low during the winter so I go to bed in long pajamas with wool socks and a t-shirt and boxers underneath. I shiver under my down comforter and cover (yeah, both). As the bed warms up and traps my body heat, I get warmer and start to strip. Invariably I end up sleeping naked with the clothing somewhere under the covers for me to find when I am making my bed.
All that is true assuming that I am sleeping alone. When my lady friend sleeps over, I sleep in boxers and t-shirt since the bed is already warm from cuddling. I find that I enjoy the most success by sleeping with my back against a wall, facing her. She hogs a twin sized bed, but looks damn cute doing it.