Get a decent saddle bag and be done with it. And always make sure the hook portion of the hook-and-loop is covered.

And regarding what items go where, there's a simple rule I follow: stuff I may need goes in my pockets, stuff the bike may need goes in the saddle bag.

Edit: a good seamstress who knows how to work with lycra can fix a hole or tear in shorts. If she (almost always a she) is really good, you'll never know you had a hole.