(In reply to John Broughton from comment #1)
> This should NOT be a low priority. It's quite common for an article to have
> ALL references inside a template - see, for example,
> https://en.wikipedia.org/wiki/Helminthopsis . 
> 
> At the moment, VE is able to figure out that the citation information is
> elsewhere - a tooltip appears that says "This reference is defined in a
> template or other generated block, and for now can be only edited in source
> mode." If VE can figure that out

We figure that out because we can tell that there's no actual reference on the page, so presumably it was made with a hack.

>, then it should be able to perform the following three additional steps:

This doesn't actually follow.


> * Check if the information is in the {{reflist}} template (match the "ref
> name=" parameter in the body of the text to a ref name parameter within the
> reflist template)

No. That would require making up a list of hack templates that each wiki uses, which is a WONTFIX if ever there was one. See instead bug 51260 which will mean we can get rid of this class of template hacks once and for all.
 
> * If a match is found, pull the relevant citation information from the
> reflist template, allowing the user to edit it

Again, this would require a list of hack extraction approaches for each of the hack templates. WONTFIX. Sorry, but these templates are ghastly abominations and should have been strangled at birth.

> * After the edit is finished, put the (modified) citation information back
> into the reflist template

That requires magic psychic modification of wikitext. Yet again, WONTFIX. Sorry.


> (Side note: for edit conflict purposes, this is an edit of the section where
> the reflist template is located, not where the footnote label exists within
> the body of the text).

You are mistaken about how edit conflict detection works. Sections don't come into it. See endless suggestions and bugs passim where this myth has been disproven.

> If VE is NOT modified to allow users to edit such references/citations,
> users are going to be (randomly) frustrated because they can't edit any
> footnotes in some articles using VE (see above) and because in some articles
> (https://en.wikipedia.org/wiki/Pope_Francis , for example), there are
> occasional footnotes that aren't editable in VE.

Or, alternatively, we could dump the stupid templates that make it harder for users even using wikitext to know what on Earth is happening, and instead use the wikitext the way it was designed, without resorting to hacks of doom?