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You're confusing two separate things.
1. Progress indication. For this the use of any contents size based measure is acceptable. I actually think using file sizes is not, since that will give the user inconsistent feedback. A file with a lot of markup and little content will have the same number of "pages" as a file with little markup and lots of content. Instead, the correct approach is to use the length of non-markup content, not the file size.
2. Referencing: To re-iterate, using paragraph numbers of referencing does not require the pre-parsing of all content in the book. And obviously, you wont use a straight number for the paragraph, instead you'd use a compund number of the form section.paragraph #
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