Generally, it's not a good idea to mix uniform items with civilian clothes (which of course the kilt is). Like others, I'd recommend a unit ballcap or shirt or some navy related civilian clothes.

Given that the parade is featuring veterans, it's clear by your presence that you are a vet. I think your participation alone marks the dignity of the event as you intend. Whatever you decide, just be sure that YOU are comfortable with the outfit.

Just my 2 cents...