Aevar noted on the meta help for references that it might be possible to use only the <ref name> tags in the body, and keep all the actual reference text in a separate section at the bottom. The ref script would of course handle everything else.
But until then I think we should adopt some simple and minor use conventions for ref tags, the first of which being to begin ref tags on a new line in the code, and likewise end the ref tag on its own line. This makes it much easier to distinguish text from ref:
Text text text. <ref> {{cite|stuff}}</ref> Continued text.
Of course these will still show up normally when displayed: Text text text[1] continued text.
The second suggested convention is to avoid putting refs in mid sentence, placing them instead at the end of complete sentences. This might not resonate well, but I thought I'd throw it out there. -Stevertigo