Actually thought you'd say getting 4th, as that would put you above LFC and give you some bragging rights, but think you've got a realistic outlook. Yes I think you'll be in the mix for 4th. In fact I'd say Villa, Everton, and LFC have a realistic shot at it as of right now, and will come down to who can be more consistent going into the stretch.
Not that I'm wishing luck on anything blue, but do think you deserve to pick up something from this season, and the UEFA cup would be fitting, and I'd aactually prefer that to you taking 4th spot.
Your right, even if you pushed into 4th spot, it would be a very long shot to win CL next year. Finances aside, there is an experience gap that you need to make up. Rafa may not have the league worked out yet, but he sure knows how to play in Europe.
I disagree with you on EPL not being realistic. I never thought we'd actaully win this year, although I hoped for it. I thought however we'd be within 9 points of the leader, which is now looking like a pipe dream. But it is doable, but takes both good management, and money. You'd better figure out that last one, as besides the current leaders who have deeper pockets, you have Spurs and Villa who look to maybe having a bit of both also.