I don't know what is the best solution, but the thread-starter is absolutely correct that the current <ref> syntax horrible clutters up edit pages - it must look a NIGHTMARE for anyone vaguely new trying to edit. We really must think of a way to fix this. To avoid breaking current pages, we'd have to introduce a new shorthand for referencing, so that the old way still works. However, to do this we'd effectively have to alter the parser, but then the <ref> tags are an extension - and the parser can hardly define syntax that you can only use if you have a particular extension. The reference extension would have to be incorporated into the MediaWiki core and no longer be an extension, before we can associate non-extension markup with it. Which is actually a pretty good idea.