Seems like you can even tell in the picture that there's a certain way that Bob hits the strings that's...let's call it unconventional. He doesn't attack them directly with the pick--the pick is angled upward a bit so that it's not hitting the strings directly. I also think he's probably hitting the strings with his right hand fingernails a bit to soften the blow. I'm sure there are guys who know more about this than me, but that's what it has always sounded (and looked) like to me. This, of course, would make it even harder to cut through the mix.
I wonder if Jon's (OP's) guitar tone is not too loud, but too harsh? Like the highs and/or mids need to be dialed back a bit? It seems to me that to play in this style, you have to BE loud, but not actually PLAY loud, if that makes any sense. You need your sound to cut through, but still play somewhat delicately and spaciously--and in order for that delicate-ness to work, the guitar has to be cranked up pretty loud. Actually quite true for the "Jerry" role too. But if your tone is harsh at all, I can see how it could elicit complaints from the other people in the band. It's quite a balancing act.
Seems to me that Bob's tone w/ Furthur is sometimes on the harsh side...my suspicion is that the old ears don't hear those high frequencies as well as they used to.