Well, the pithy answer is that they had these complicated rules because their ancestors did. The "cult of mourning" is considered to have begun in the 1860s with Queen Victoria's widowhood, but evidence of graduated tiers of full, second, and half mourning exists from the 17th century at least. Traditions regarding the wearing and giving of mourning rings stretch back even further.

The French codes for mourning stretch back to that point as well (Louis XV or his regent is supposed to have cut the required periods in half in 1716 with a King's Ordinance, and we don't know how far back the original ones date to), while English rules don't appear in print until the mid-19th century. This French tradition is extremely similar to what's found in 19th century English etiquette guides. As the French rules first appear in English translation in the 1780s and were therefore known in Great Britain, it's possible that they were outright adopted; however, that translation ended with "the English reader will be enabled to trace the analogy between our mourning and that of France," which implies to me that a similar system of rules for the timing of depths of mourning was in place in English society at that time. American etiquette books insisted throughout the century that mourning should follow grief and that no time periods of mourning were required, but foreign travelers sometimes remarked that both Americans and Britons wore mourning excessively even for distant relatives.

One reason commonly given in etiquette books, and sometimes implied in fiction, for all of this external show is to make it very obvious to the outside world that the mourner is not happy and shouldn't be approached with levity or carelessness. The 18th century Young Gentleman and Lady Instructed relates that mourning was originally worn so the mourners "had nothing about them so light and gay, as to be irksome to the gloom and melancholy of their inward reflections; or that might misrepresent them to the world." If you were grieving, you were free from trying to mask your grief for the benefit of others.

Close adherence to the rules of mourning dress and putting up displays of bunting would be both a way to signal to the outside world that grief was present, but also a show of conspicuous consumption, to be more cynical. Getting a black bombazine dress with crepe trim, then a black silk dress with white or lavender trim, then a purple one with blue trim (not even getting into jet jewelry, then onyx jewelry with silver, then whatever came next!) was an expensive deal. The yards of black cloth needed for draping a house or carriage would also be expensive.

Something to bear in mind, though, is why all of these guides on mourning etiquette were necessary. Like sumptuary laws, etiquette books are mainly evidence of what rules people are not commonly following - if they were, it would be unnecessary to point them out. If merchants aren't wearing velvet and swords, you don't need to legislate to keep them from doing it. If people were highly familiar with these mourning codes through constant use, the etiquette books may not have been needed - and all through the 19th century, etiquette books could be snippy about people who left it off too early (although they were also snippy about wearing it without true grief, so ...), which also implies that the rules were not rigidly followed. And it must be remembered that etiquette books were also consumed by the middle and upper classes, not the entirety of society.

Hair jewelry wasn't all for mourning - anything woven of hair to make a cord or a hollow shape is 99.999999999999% likely to have been made using hair bought from some girl in the country, the provenance the owner has notwithstanding - and even the pieces that were made as momentoes were sometimes mementoes of living people. But the ones that were mourning pieces were just remembrances of people who'd been lost. There wasn't a lot of ritual to them.

For more information on the specifics of the mourning stages, I have a long and cited blog post on the subject.

As some have answered above me, the Victorian death traditions were followed only as far as the families could afford. In a poor or middle class family, especially with the continued expense of purple dye, the lavender transition was often overlooked. In "Death, grief and mourning" Pat Jalland goes as far as to call the Victorian mourning costume “snobbery, social climbing and profits of the mourning industry” (Jalland 171). So basically, “you’re too rich to out-mourn me!” In the same way that you could tell the age of a girl by the length of her dress, you could tell the length of mourning by the outfit and shade. In a way, this was an easy way to be considerate—depending on the stage you weren’t expected to be invited to social events, and you were free to mourn without concealing (184). Of course, this then leads to the out-mourning mentioned above.

This even extended to the private quarters of the dying. It was hoped that they would die slowly and have time for religious absolution and to say goodbye to extended families. Unfortunately, with family gathered in one place this also lead to an expected prostration of grief. There was a Victorian belief that the dying body was to become more pious and Christ-like, while the witnesses were to be weak and filled with “earthly grief.” This was apparently difficult for Henry Wescott, who found it difficult to cry at a family member’s deathbed (Cadwaller, 41).

In a strange turn of events, this History Channel website actually discusses accurate history and not Ice Road Truckers. Memento Mori’s had long been present, with hair bracelets being mentioned as far back as the 16th century, and in the poetry of John Donne (see “The Relic” and “The Funeral”). There are many 18th century hair tokens, both for love and death, on display at the V&A Museum in London. These “remember me” tokens coincided with photographs of dead relatives, which are incredibly creepy to look at. This of course required the money for a sitting, and showed the comfort of proximity with the dead.

One reason for this comfort is simply due to the higher mortality rate of the time period. Death, simply put, happened more often. But by the end of the Victorian period, both in populated regions of the U.S. and in England, it was only the poor and middle class that would continue this intimacy with the dead, preparing the body and watching over the corpse in the days before internment. The wealthy Victorians are responsible for the birth of the funeral parlor. The body would become more and more alien to home life as the wealthy paid for undertakers and competitively ostentatious funerals outside of the home. As the dead body became more “sanitized” those who spent time with the diseased body of the dead were soon after looked down upon for being dirty, thus more Victorian class struggles (Hotz).

Cadwaller, Alan H. “Pedalling the Death of a Life: A Late Victorian Variation on Dealing with Grief.” Journal of Religious History 38.1 (March 2014): 35-52.

Hotz, Mary Elizabeth. Literary Remains: Representatives of Death and Burial in Victorian England. New York: State University of New York Press, 2009.

Jalland, Pat. 'Death, grief and mourning' in Ralph Houlbrooke [ed] Death, Ritual and Bereavement, Routledge, London, 1989.

EDIT: It's worth noting that the American South in particular emulated Victorian England, especially in their modeling of the "Southern Gentleman" and perfect "Southern Belle." Hopefully it doesn't look like I've lumped them together too much, but imagine many places in America doing a watered-down version of Victorian practices.

Karen Halttunen's venerable study Confidence Men and Painted Women: A Study of Middle-Class Culture in America, 1830-1870 (Yale UP, 1982) has a chapter on mourning. It's been some time since I've read the book myself, but as I recall it was essentially an arms race. Elaborate mourning rituals were a form of social competitiveness, one of many engaged in by bourgeois households, especially among women, who, freed of any direct responsibility for labor and barred from the formal workplace, were forced to look towards fashion, home decor, and elaborate entertaining rituals for activity and meaning in their lives. A natural desire to show the effect of a loss on the survivors evolved into yet another form of conspicuous consumption. Eventually this all got so out of hand that it become fashionable to mourn much more simply, expressing one's truly-felt grief instead of engaging in a foolish game of social one-upsmanship.