Periods and Commas: Inside Quotation Marks or Outside?

(1) At VC, commentor John Blake said,

.... a direct quote requires enclosed quotation marks: “No more of this,” he said. Said he, “No more of this.” In the second instance, a period after the last quotation mark would be redundant. Citations or indirect quotes do NOT enclose quotation marks: Chronicles admonish, “From the fury of the Norsemen, good Lord deliver us”.

Those are good examples for the problem. Pure logic, the defense commonly used for the British rule, requires that redundant comma:

Said he, “No more of this.”.

The Norsemen quote looks funny. The period at the end is too far from the final word, because the high-up quotation marks separate it off. Also, the reader expects some punctuation at the end of a sentence, and there isn't any at the end of the quoted sentence. If it ends there, adding a period would be fine as part of the quotation. If it doesn't, then really there should be three dots, like this:

Chronicles admonish, “From the fury of the Norsemen, good Lord deliver us...”.

or this:

Chronicles admonish, “From the fury of the Norsemen, good Lord deliver us....”

I don't like the look of either sentence. What should I do? (2) The tradeoff is not really Form versus Function. The aesthetic problem here is not completely subjective, and is not distinct from clarity. The period is objectively far from the last word, under the British rule. And if something looks odd in a paragraph, it distracts the reader, reducing clarity. Commentor Henry Schaffer said:

Several people have pointed out that the American rule alters the quoted material. A long time ago I wrote a short computer manual, and put gave an example — essentially _quodlibet_’s one — I wrote the equivalent of:

Enter the command “cp foo/bar”.

The editor changed this for the distributed version to read:

Enter the command “cp foo/bar.”

This version of the instruction didn’t work, but the defense was that it was grammatically correct and mine was not.

Another commentor says:

As to following sentence ending periods with two spaces, that is an excellent rule, even with non-fixed width fonts because it distinguishes sentence ending periods from abbreviation marks. Also, fixed width fonts are the best for any and all computer work, and even for e-mail.

Another commentor gives these examples:

Jones assured me, “You have nothing to worry about.”

Hale said, “Give me liberty or give me death!”

Still, Obama assures us, “We will be better off after this reform bill passes”!

What makes you think that your only choice is, “Give me liberty or give me death”?

He spoke of “blue skies,” “black nights,” and “green grass.”

He spoke over and over of “blue skies,” “black nights,” and “green grass”; I got bored and left.

Another gives

“Kicking the ball through the uprights is called a ‘field goal’, and is worth three points.”

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