Is it permissible for the wife to become completely naked during intercourse or foreplay, and does that contradict the manners of marital relations?

There is no obligation for a husband and wife to cover themselves during intercourse or foreplay. The hadith narrated by Utbah ibn Abd al-Sulami, "When one of you comes to his wife, let him cover himself, and not undress completely like donkeys," is weak in its chain of transmission (isnad) and therefore cannot be used as a proof. The nudity of each spouse before the other does not contradict etiquette or marital relations.