Rice really saw Jack

Yes, it seems that way, and doesn't make any sense, since he was just in the kid's imagination. Maybe E.T. left the kid with some magical powers we will never understand.

According to the scripts I checked for this, it seemed that Rice only sensed another presence because Davey was looking and speaking to his right.

But the way it was edited, Rice seemed to be looking before that, when just Jack was taunting him. And then afterwards, Davey says, "He could see you."

So I think they may have taken some liberties with the script in the editing process, and in giving Davey that line.

No harm in adding a little bit of Twilight Zone mystery to the story. It's all just unlikely fiction anyway.

____________________
The story is king.

Rice doesn't actually see Jack Flack, but he imagines someone is there because of how Davey acts.

Rice is shown following Davey's gaze nervously as he looks into the shadows, wondering what he's looking at. When Davey shouts to Jack, Rice panics, believing someone is actually there.

So, in that sense, he "saw" him like Davey says, but it's not supernatural.

After just rewatching, it looks like Rice senses something there, and it's almost like he's hearing Jack speaking to Davey. It seems like much more than Rice reacting to Davey's speaking to and looking towards Jack.

Also, the story has Davey refusing to shoot Rice, but then after Rice shoots (at) Jack, Davey shoots Rice to defend Jack. It was important that Davey does not shoot first, but only in defense of Jack and himself.

So the device of Rice seeing or sensing Jack is needed to have Davey shooting second, purely in defense.

____________________
The story is king.