There's a school of thought that says, in a similar situation, the machines could (should?) be named:
And those registered as their A names in DNS. Then C names added for the www and other services.
Remember, you want to name the machines, not their services. There are other mechanisms (C names, /etc/services) to name the services offered by those machines. Allows for greater flex later if you want to do other things.
/etc/hosts should have localhost.localdomain set to 127.0.0.1 - same as default - not for outside connectivity, but for functions within the system. The loopback connector is used more than one would think.
If the box's external IP is - say - 10.0.0.2 a quick and dirty method to deal with this is:
127.0.0.1 localhost localhost.localdomain
10.0.0.2 web1.com www.web1.com
Best yet, just leave /etc/hosts alone, at it's default setup and add the IPs, names C names and MX records for each box to your local DNS server. Special if you get more than about 5 boxes going - that's worth the trivial effort it takes to setup DHCP and DNS for your LAN.