SEQ and REF field code usage

In order to generate those ref codes you need to use the cross reference dialogue box to insert your cross references. When using a custom seq field you can force word to add your seq field into the cross reference dialogue so that making cross references to it is easier (as you requested). I have used the following method several times in my own documents. To force word to add your seq field into the cross ref dialogue box :

1. select "Insert Caption" ( it doesn't matter where you are in your document)

2. from the insert caption dialogue box select "New Label"

3. exactly type in the name of the seq field identifier which you have used on your document (which is within the field code {} brackets (toggle the field code using alt F9 to find out the identifier for a seq field)  (if it doesn't match it wont work))

4. select "ok", a label for your seq field will appear in the insert caption dialogue box

5. then select "cancel"

6. From the cross reference dialogue box select you field code from the "reference type" down menu. It will now list all your seq field entries with the chosen identifier. If it doesn't work double check the identifier matches your field code.  

This process can also be used if the Cross Reference dialogue box loses a Seq field, which has occasionally occurred in some of my documents. 

In order to use REF fields to refer to paragraphs numbered manually with SEQ fields, you will have to manually insert bookmarks around the numbers and then reference the content of those bookmarks.

If you used auto numbering, the REF fields would update automatically (though not dynamically) when the auto numbers change. In your example, if the paragraph number changed from 1 to 5, the cross-reference would not immediately update, but it would be updated when you print or otherwise update fields.