] As far as his rank in society goes, Charles Musgrove is just barely good enough for Sir Walter's daughter.

True, but in Musgrove's case:

"Charles Musgrove was the eldest son of a man whose landed property and general importance were second in that country only to Sir Walter's,"

Charles was the catch of the neighborhood - second in wealth and status only to Sir Walter. He's not a baronet, of course, and he wouldn't do for Elizabeth, but really what else could he expect for Anne or Mary? Elizabeth was the only one who was allowed to go to London for the season, to meet a wider variety of men.