I learned to read music when I was a kid (piano, flute, sax), then took many years away from music while life was happening. Ergo, I forgot most of the music I actually did learn to read. I never learned to play by ear and I'm having to learn that now (I'm such a total bass n00b - right at six months of seriousness and have never gigged). I've never played guitar so watching their hands would likely result in only a lot more confusion.
I have been lucky - when I fill in for my buddy's band at rehearsals if I position myself just so, I can see the drummer's foot (anticipation) and hear the keyboard player when he tells me what key he's going to go to next. When I mess up, they laugh at me and we move on. It's all in good fun. Every now and again, I'll do something right. That's when they add something new for me to learn.
I tend to follow two key rules.
1) Root notes are my friend when I don't know what else to do.
2) If I mess up, playing it twice makes it a new arrangement and not a mistake.
Well, since I have forgotten how to read music 3 times now, I get it.
I am going to share my main rule. You can do whatever the heck you want as long as you are back on a strong ONE consistently.
Hook it up with your 'anticipation', lock up on THE ONE with the drummer. Free form, groove and feel the rest and be back on a strong ONE. They will think you meant every note.
Perhaps...