Looks like Willie Watson right hand position is pretty similar to Devon’s in this video, right down to the raised elbow.
[video]http://www.youtube.com/watch?v=BcM4QLdZLBY[/video]
I usually pick at the edge of, or just behind, the sound hole, but the natural arc of my arm tends to cause me to pick slightly closer to the bridge on the first and second strings which can produce a thin tone (must be a D18 thing, oldhat). Sometimes I’ll try to compensate by shifting my hand forward a little as I pick the thinner strings, but it’s not something I do normally.