Explanation:

To understand why the correct answer is "colorfully," we need to analyze the sentence structure and the role of the word in question.

Sentence Structure:
The sentence is structured as follows: "Everybody at the party was ---- dressed."

Here, the word "dressed" is a past participle verb that describes the state or condition of the subject, which is "everybody." To complete the sentence, we need an adverb that modifies the verb "dressed" and provides information about the manner or style of dressing.

Adverb Form:
In English, adverbs are often formed by adding "-ly" to the adjective form. For example, the adjective "colorful" becomes the adverb "colorfully."

Adjective vs Adverb:
In this sentence, we are describing how the people at the party were dressed, which is an action or behavior. Therefore, we need to use the adverb form "colorfully" to accurately convey the manner in which they were dressed.

Use of Adverb:
The adverb "colorfully" indicates that the people at the party were dressed in a colorful or vibrant manner. It adds more detail and vividness to the description, enhancing the visual image of the scene.

Visual Appeal:
When analyzing the sentence, it is important to understand the grammatical rules and the context in which the word is used. By choosing the correct adverb form, "colorfully," we ensure that the sentence is grammatically correct and conveys the intended meaning.

In conclusion, the correct answer is "colorfully" because it is the appropriate adverb form that accurately describes the manner in which the people at the party were dressed.