Insert text block in node add/edit form

Yes, you can. For example:

1) Implement hook_form_alter() to insert a #markup element with the contents you wish.
2) Implement hook_content_extra_fields() to allow you to move this element to the top of the form in "Manage fields" screen.

Another option:

Search for markup module.

Where is the best place to add these hooks? Forgive my ignorance, but I assumed I would have to add it to a custom module, which I think is overkill. My next idea was to add page-node-add-some_type.tpl.php (change "some_type") to the theme folder, but I feel that's too much also because a lot of the markup is duplicated from page.tpl.php.

My current solution is to use THEME_preprocess_page in template.php add add help text from another node:

function NGSS_TRS_preprocess_page(&$vars, $hook) {
  if ((arg(0) == 'node') && (arg(1) == 'add') && (arg(2) == 'some_type')) {
    $vars['title'] = t('Title of form');
    $vars['help'] = node_view(node_load(10)); // replace 10 with whatever node has your help text
  }
}

Any better ideas?

Re: Any better ideas?

Nope. If it works, then that's fine too.