Reeling in would seem to lessen the fall factor, wouldn't it?
Take the following situation: 5' from the last pro, 15' up from the belay. In a normal (unreeled) fall, the leader will fall (5' x 2) / 15 = FF .66, right?
Now convert this to a "reeled" belay: Let's say the belayer manages to reel in 2' of rope during the fall. The leader is still going to fall the original 5 feet to the anchor, regardless of how much is reeled. But, he will only fall an additional 3 feet below the anchor, since 2 feet of rope was removed from the system. That would be an 8' fall, with 13 feet of rope, right? 8/13 = FF .61
Is my math right?
I guess you would need to decide if the FF was high enough to warrant the possibly dangerous task of trying to take in quick enough while still locking off in time to catch the fall.
As to the question posed in the OT, I'm not sure how you could safely take in more than and arm's length of rope, and if you would want to.