I am editing JSP files which are residing directly inside tomcat/webapps/myapp/WEB-INF, but to see the changes, I have to restart the server. As far as I know,
A late answer, anyone else might find this useful though.
Check the permissions on the Tomcat folder, I have tried a lot of other solutions and it did not work out.
Finally I gave my 'user account' 'Full control' permission to the Tomcat folder and Tomcat picked up the changes whenever I made a change in JSP. I am assuming you are using Windows.
The rationale behind this was: whenever you make a change in JSP, it has to be compiled and deployed (written) to the webapps folder. If there is no 'write' permission on that folder, it will silently fail. This was happening in my case. So if reloadable = true and development = true in the context.xml do not work, try this permission fix.
I am using Tomcat 7 on Windows 7.