Characterization is such a big subject, I'm going to take a small slice of it. Name.
No, not what the names mean (though that can be important), but how we use them.
"The rule of thumb is that the narrator of the story will refer to each character the same way every time." (Card, Characters and Viewpoint)
The first time I read that, the proverbial light bulb went on over my head. I looked at some of the things I'd written and found I had generally followed it. (Wipe forehead in relief.) I looked at some of the stories I was reading and found that people who broke that rule were writing things I didn't like, usually because their stories were poorly organized and poorly done. I remember one paragraph in one story where the writer used more appellations for a character than there were sentences in the paragraph. Something like:
Joe scanned his security card and Sue the security guard waved to the brown-haired man. The green-eyed man boarded the elevator. The computer genius walked to his office.
Ignore the lame predicates. Imagine the predicates are the ultimate in soaring prose. I still want to scream. People keep appearing. There's Joe and Sue, okay. Then there's this brown-haired guy, and one with green eyes and a computer genius and…. AAAGGGHH!! Judge! Judge! Objection!! Insufficient foundation! (Objection sustained, the writer is cited for contempt.)
Geek that I am, I think it would be interesting to look for a correlation between "multitudinous names for one character" and "fiction I don't like."
"But wait," you say. "Rules are made to be broken."
Of course. To his credit, Card says it is a "rule of thumb." It isn't hard and fast. What gets written is the writer's choice.
"And he says 'the narrator' should use one name..."
Yeah. So maybe you're tempted to get crazy with characters referring to characters. But that creates problems too, especially if you're writing third-person limited viewpoint through different characters' eyes.
I agree that it makes sense, is often necessary, for a character to have many names in the mouths of different characters.
For example, Dan Lombardi is a lieutenant in the Army, father of two, has a wife, sister and a father. We might end up with "Dad" or "Oh Father" from the 14-yr-old and "Daaaaddyyyyy" or "meanie" from the 4-yr-old, "Dan" or "honey" from his wife, "Dan" and "bro" from the sister and "Danny" or "son" from his father. The point of Card's "rule" is that these characters should be fairly consistent in what they call Dan, and probably completely consistent in narrative.
Depending on how the viewpoint shifts or exactly what happens in the story, the rule flexes a bit more.
For example, maybe his wife finds Dan is sleeping with that new supply clerk (who is ten years older than her!) and starts calling him "cheating bastard". As long as the story provides the foundation, his is a logical shift in names.
Or maybe Sgt. Smith calls Dan "Lt. Lombardi" or "Lieutenant" to his face, but refers to him as "Lumpy" when speaking to the other four sergeants around the poker table on Friday nights. That makes sense. But Smith wouldn't call him "Lombardi" in one breath, "Lumpy" in the next and "the brown-eyed lieutenant" in the third.
The latter example nails home another point. Would the viewpoint character (or anyone in your story) rationally refer to a character that way? How many sergeants can you imagine referring to "the brown-eyed lieutenant" if they know the guy's name? (If he's close enough to tell he has brown eyes, he's close enough to read his name tag.) They might call him by name or by a nickname or even "that idiot," but "brown-eyed lieutenant"?
Maybe:
Mary looked at Dan as he slept on the couch. Forty years down the road, the young, energetic, brown-eyed lieutenant she'd married was old and got tired shopping at the PX. But his eyes were still brown and he was still a lieutenant.
Not only is Dan still a lieutenant (wonder why after forty years) but he is still "Dan" in Mary's mind (first sentence). She doesn't use his brown eyes and other attributes to name him, but to describe how he has aged. (Compare to the earlier example with Joe and Sue where the description was used to identify him leading to massive confusion.)
One technique that can help maintain consistency is to draw a name map. One volume of Orion no Shounen, a manga series (yes, you knew it was coming) included a name map showing who called who what. The characters followed traditional cultural hierarchies when addressing one another leading to a potentially confusing plethora of suffixes and names. Sometimes a name map isn't necessary. For example, in Fruits Basket, several characters were constantly coming up with new nicknames for Kyo to annoy him. His name would change from panel to panel. Potential for scream. But after he erupted a few times and the others laughed, it became easy to tell they meant Kyo (usually because he or his mini-image was fuming somewhere in the panel). Traditional prose would require some similar device or a group of readers who understand the nickname formation rules.
Oh, and if you're worried about constantly writing "Dan" to refer to Dan, Card points out that pronouns are cool.
Dan walked into his office and read the memo on his desk. That idiot Smith was calling him incompetent? Him? He'd been doing this job for longer than that teenybopper Smith had been alive!
Not "Danned" to death? Not trying to sort out the brown-eyed lieutenant, the sandy-haired man, the old man, the career Army man and fifteen other characters who are all "Dan"? Yeah. Pronouns rule.
Finally, I throw out one more quote from a "how-to" book that supports this idea of consistency in character names.
"Decide how you are going to refer to a character and stick with it for at least the length of the scene." (Browne & King, Self-editing for Fiction Writers) Which is one of the recommended texts for the class.