Junior refs should be "coaching" all players in how to follow the rules, and thanking players for their displays of good sportsmanship (such as calling the ball out if they touch it last).
I've reffed basketball, Aussie rules and soccer (soccer very badly btw). I’ve always reffed that way. Communication is key. In basketball, I’ve sometimes called a violation out of bounds, when minor contact by defensive player leads to ball going out off offensive player. Only if the contact wasn’t enough to warrant a foul, but did disadvantage the offensive team. I have been questioned about this, but gave the defensive coach the option of Changing the call to a foul.
In Aussie Rules, I’ve reffed Auskick games at half time in AFL games. In Auskick in my area, trying to mark with 2 hands (ie practicing a skill young kids need to learn) is supposed to be rewarded with a mark being paid. As kids get older, we just expect them to get closer to a real mark to pay it. At the AFL half time games, I monitored to see which kids hadn’t had a kick. Towards the game’s end, I tried to pay a free kick to the kids who haven’t had a touch. Parents want to take their kids to play at the Gabba, Metricon or even the MCG, to have their 6m 7 or 8 year olds be able to say they had a kick. Denying a young kid an experience like that is wrong.
In junior sport, we’re not playing for sheep stations. We’re here for kids to have a good time with their mates and develop skills, teamwork and sportsmanship. Everything else is secondary until you get to around 15 or so. Then the kids know who’s good and should have developed the maturity to handle not being “the winner”. Perhaps parents need to learn this too. They should be modelling respect for the people who are in authority and make their games possible.