i saw something related to this on discovery or national geographic or one of those channels last night
in the old days, raingages were relied on pretty heavily to measure precipitation and since they are prone to the type of problems you point out, and also, since they are spread out so much (only one every dozen/tens/hundreds of miles) , localized rainfall was never measured
apparently these days, according to this tv show, instead of measuring precipitation primarily with raingages, they use Radar to measure precipitation. radar isn't susceptable to the problems you mention and it can measure large areas from a single radar installation. so a major weather station can measure rainfall over several hundred square miles and many times more accurately than raingages