The best way to see where your arrow goes while it is in flight, in my experience, is to use a flourescent nock. You will always be able to see the nock as the arrow flies to its destination. I have found that if your arrow flies well then you don't see the color on the shaft while it is in flight anyway, so it won't help in seeing where the arrow goes.
As for seeing it after it lands, spray painting some or most of the shaft in a high visibilty color is definitely a good idea to help find your arrow if it buries itself in the dirt/leaf clutter, and it's one that many folks do. Pick the color that stands out the most for YOU as each person sees color a little differently, flourescent green might jump out more than white to you, or plain red might be the best choice for your eyes.
Another approach, which works well for a really buried shaft, is to put a band of reflective tape/arrow wrap on your shaft so that in low light or at night you can use a flashlight to see it. Even the smallest bit showing will jump out at you when the light hits it.