Thanks for the useful insights. Yeah, Belew dealt with this early on by briefly explaining to his audience the concept of looping and then asking "would you like to see me make a loop?"
Always engage the audience in what you are doing, ALTHOUGH if you are playing a "hip" place like the Zeitgeist Gallery and your audience is made up of jaded, "seen-it-all" musicians, explanations are perhaps unnecessary. Friendly banter, yes, but not explanations, not to a crowd like that. That'd be like presuming to explain physics to Einstein (LOL).
Another idea for humanizing the looping thing, whether you're playing to "civilians" or to fellow musicians, is to do the Tris Lozaw Auto 66 thing... using a kitchen timer to limit your jams to, say, 5 minutes each.