I have been trying to figure out the intricacies of the .NET garbage collection system and I have a question related to C# reference parameters. If I understand correctly, v
It is exactly how you mention it in the last sentence. The GC will move all needed references when it compacts the heap (except for references to unmanaged memory).
Note that using the stack or heap is related to an instance variable being of a value or reference type. Value types (structs and 'simple' types like int, double, etc) are always on the stack, classes are always in the heap (what is in the stack is the reference - the pointer - to the allocated memory for the instance).
Edit: as correctly noted below in the comment, the second paragraph was written much too quickly. If a value type instance is a member of a class, it will not be stored in the stack, it will be in the heap like the rest of the members.