skinning rigging with skeleton aside.
 

Are there any pros and cons to rigging and skinning with the skeleton off to the side? I see a few tutorials that do this, I guess so its easier to grab effectors and move then, sort of like a puppet. But other tutorials put the bones and joints in the skin, is one better then the other?

in the mesh for sure, you will have issues later if you approach rigging out side the model.

If you having trouble picking make use of the picking mas :).