If two or more sentences are based off the same source of information, then you can make one reference at the end of the last sentence - you don't need to do it for every sentence if they all come from the same source.
You use a reference for individual sentences when they come from different sources (if you're referencing information from the books, and each sentence is based off a different page/book, then you'd make a separate reference accordingly).
Do we still put references under book headings (eg. 'In The Valley of the Lost') in the character pages?
No - if I'm understanding this question. Why would you need to reference a book title? Remember, references are used to back up information. You can say "Jasmine liked eating cake.", but to make this statement valid, you need to include a reference that states where this information was found (example; one of the official books - the best source of canon information).
See: Deltora Quest Wiki:Verifiability
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