Have you tried using a micro-soldering pencil?  I moved to one about 4 years ago, and never looked back!  It places your fingers very close to the work, as close as in that ridiculous picture. Here's an example of one: http://www.tequipment.net/Weller/T0052921799/Soldering-Equipment/?Source=googleshopping&gclid=CK3ywq-Yjc0CFVFsfgodIb8AUA

neat idea! glad that even pro industry needs such a product. I'm hoping that a cheap insulator can help me use my run-of-the-mill weller in a similar fashion

You should have a look at a project from one of our fellow HADers: https://hackaday.io/project/10140

That one is close, and I want to try putting one of them together myself to find out why that 3-4" gap between handle and iron tip is there :)

With these Weller RT tips the gap between tip and handle is a bit less than 2" (say, 3-4cm). You can try, but I don't think you would want to get your fingers much closer to the tip for a few reasons. First is to keep a safe distance considering the high temperature, but second and maybe more important and significant is ergonomics. When working on PCBs with fine pitch components you sometimes need as much manoeuvring space as you can get, in that case you will be severely limited by the width of the pen and your fingers, so a bit more extreme angles will be nearly impossible. 

I think that using a rounder or almost diamond-like tip shape would allow the thin tip to be angled enough to ensure enough thermal contact with the pad. compared to solder pads used for through hole devices, 0402 signal pads have very little surface area to wick heat away.

but this requires testing to be sure :)

I have a similar one. the smaller pencil leaves alot to be desired as far as insulation goes, but definitely alot easier to work with.

cool idea

thanks :) i'm hoping it will solve my personal frustrations with soldering fine pitch components, and help others with their hobby as well!

Yeah, the soldering pens by weller are a pretty good form factor, it would be nice sometimes to hold a little closer to the tip though.  I bet you could figure out a way to make a handle that is just a coaxial extension that attaches 3-4" back from the tip, but extends forward closer to the tip with an internal air gap.

I love my weller too, so perhaps to start, I could see if I could make a sleeve or replacement collar for my weller. A coworker was talking about the ceramics they use on the space shuttle, which made me think if the collar/neck assembly itself could be made of a similar ceramic, leaving just the working tip exposed. This leaves the entirety of the pencil being grippable for choosing your own balance level.

Practice, practice, practice.  Soldering is like Zen for me - very relaxing.  I use a regular Weller WESD51 for 0.5mm pitch soldering if I have to.  

Reflow with solder paste and stencils is the way to do it.  I do the hard way to save money.