he thinks I'm pretty even when I don't
...that's the trick that does it for the film as well : to think otherwise than what the person in question does about one's self.
- - - - -
Now as for the OP's issue about Blair having been miscast, I do not agree. Everything that "Clara" stood for, was "unattractive" in most peoples eyes (her natural looks, her demeanor, her ethics, her dress code etc). She didn't have to be "real *beep* ugly" (here IMDB's scripts are gonna put some asterisks from what I presume, but you get what I meant anyway), or even "more average" than she already was so as to be called "a dog" by either that low-life opportunist that took her to the "Stardust" in the first place, or by those friends of Marty's that could only appreciate as "non-dogs" some slutty enough nurses or others of the like.
Plus, no matter what Blair is considered to have been, regarding looks, the way she is portrayed in the film, as "Clara", is not somebody you'd call a "dog", yet she simply is not the attractive type either - the one your mice will go click as soon as you see her. And like I said a few lines before, that's the idea : Marty (who himself wasn't "ugly" at all as well) manages to see beyond what the others are CONSTANTLY telling him, trying to (directly or indirectly) define his very own life : that it's a shame that certain people are being outcast as "dogs", even when they actually are not THAT "unattractive", without even been given the chance to show to the world qualities that do matter, after a first visual impression, or even after one night's stand.
So the way I see it, what the film is trying to convey is not the message that "even ugly people have a right to companionship", but "judging by superficial standards is what actually is ugly in the deal". 'Cause both "Marty" and "Clara", weren't ugly looking freaks anyway. Not by chance - not because the director couldn't get some even less appealing figures for his film, but because he didn't want them to be different than what we eventually saw. So no need then that they should have cast other than Mrs Blair.