Commerce Product Display Node using Multiple Fields?
Yes you can do this. Just 2 list fields for your product type, 1 for color and 1 for size. 

When creating your products, have the clothes of the same size use the same image.

When you create a product display node, you will see both of the select lists displayed. When you select a different color the image will change.

The issue I am having is that when selecting option 2 and then option 1, option 2 will reset back to its default value.  The risk is that a customer will not notice and order the wrong product.