When I ran Raven's Purge I allowed all equipment to be transformed, and also allowed unlimited size changing (within the conditions already mentioned in the rulebook). However, I would not run it this way if I did it again, because this spell can easily become extremely powerful.
I would rule that including your clothing and equipment increases the required power level of the spell. I would also rule that, by default, you transform in to a human-sized animal such as a dog or seal, and that transforming into anything significantly larger or smaller (like a bird or a cow) also increases the power level of the spell, perhaps more than one.
The reason for this is that, otherwise, this spell can be a complete get-out-of-jain free card for a druid. Literally! They could transform into a gnat and fly through the bars of any prison, into a fish and swim to the bottom of any lake, and still transform back with all their equipment intact. Increasing the power level makes the spell more taxing and more risky. I like forcing hard choices on players - sure, you can transform into a bird and escape from the flood waters, but...all your gear will be lost, and when you transform back you will be naked... (that's feels pretty in-character for a druid).
I personally did not require the spell to be re-cast to return to your natural form, although I think that's exactly what the rules require. I simply allowed the caster to return to normal at will. I think the re-casting requirement is pretty harsh. Also, the druid has lost most of their mental faculties, so I'm not sure how they are supposed to cast a spell when in animal form anyway.