I usually leave the bait 4-8 inches from the rod. You think that would be long enough to separate the worm from the high vis and not bother the fish?

You don't leave your self much room for casting. Only 4-8" I can't imagine it loads to well. Maybe with 8 but I am not sure about 4". I think any where from about 12-18" is ideal for getting the most out of your cast. Also micro guides are crappy for leaders and I do not really know a good way around it if there even is one. A knot should not damage any rod though unless something was wrong with the guide to begin with or your tie small rocks into your knot somehow. It is the lightest little tic tic tic as it goes through and makes like no difference.

If you need more than 6" to properly load the rod, you using the wrong rod.

I am not saying it cant be done. I think somewhere around the 12" mark is probably optimal though.

I make mine about 6 feet, just so I don't have to retie a leader very often. I can switch baits or break off several times on a 6 foot leader before needing to retie. I use an alberto knot and barely even notice it going through the guides.

+1