Cross References on a Master Page?

Yes. I also use cross-references on a master page.

They link to the page number of the last page, so that I can have something like this in the footer: currentpage/last page

(FrameMaker does not have a variable for the last page in a book.)

What I noticed: When I update the book, the cross-references seems to be blank. When I double-click on it, I just have to re-insert so that it shows again.

In a recent project I used MP Xrefs for major book navigation. Most pages had top-margin links for Contents and Index. 

Fundamentally, it works. Chapter-to-chapter would likely require that the default L/R/etc pages in each chapter.fm file be customized for that chapter, linked fwd/back to the adjacent files.

I have used the cross-reference feature in un-structured framemaker to use the text as a Return Text Feature. Now i use hyper-text > jump to page number> Enter the page #. Then draw this box over whatever picture or text you have selected (always make sure the text box with invisable hypertext is in front of the object you would like clickable in the pdf). Hopefully i am understanding your question correctly.

Hopefully this helps