The college where I went might have been weird, but it definitely seemed that complete nudity was unacceptable there, except with sex partners. People really didn't treat their own sex very differently than the opposite sex. Underwear were as good as business suits though, and you could be seen at any hour of the day in them, as long as you were in a dormitory building, although it might have seemed odd if someone spent the whole day in only underwear.
I wish I had found a roommate who was fine with masturbating in each others' presence, but even roommates seemed to adhere to the no full frontal nudity rule. From what I heard, almost everyone returned from the shower in a towel or underwear and only went underwearless with towels around their wastes.
The school where I went is very politically and socially liberal with very few religious people and very few people from South of Virginia. A high percentage of students (maybe 30%) identify as "LGBT." My impression is that, ironically, nudity among men is more acceptable in the South and at more politically conservative, less diverse schools.
With regard to masturbation with a roommate, I would get to know the roommate and, if the two of you get along, have that conversation relatively early on. You could begin with -- "You know, of course we both masturbate, and it can be inconvenient when you share a room with someone . . ."