Contextual editing can be a pain when the padding and margins are at zero where you have widgets stacked on widgets.
Could I suggest a left or right ‘gutter’ option in additional to ‘bottom-right’, ‘top-left’, etc for controls (gutters are x-max or x-min +/- controller area width). If the control buttons were on display in y positions (y stacked) and named in y-index order + plus meta names, this would make life so much easier as every control would be displayed and accessible without countless hovering attempts. It would also look really cool as well!
A line connecting the gutter button to the div would be nice but not important. The important thing is being able to edit widgets that are close to other widgets, which can be impossible at the moment without excessive padding and margins.