The null reference was invented by Hoare as a means to implement optional types, which works regardless of their binary representation.
Optional types were a very valuable invention and the fact that null values have been handled incorrectly in many programming languages or environments is not Hoare's fault.
Having "Optional types" only makes sense if your type system is powerful enough.
There are two ways this might happen, both will solve the Billion Dollar Problem but I think one is the clear winner. The first way is explicit optionality, often retro-fitted to languages for example in C# the difference between the types Goose and Goose? are that (in a suitable C# project enabling this rule) the first one is always a Goose and the second might be null instead.
The second way is if you have Sum types you can just add "or it's null" to the type.
I think sum types are better because they pass my "three purposes" rule where I can think of not one (Option<T> replaces optionality) or two (Result<T,E> for error handling) but at least three (ControlFlow<B, C> reifies control flow) distinct problems I don't need separate solutions for any more if I have this feature.
If your type system is too weak you suffer the Billion Dollar problem with Hoare's idea and perhaps if this "feature" had never been invented we'd have all migrated to languages with a better type system decades ago.
I agree that for the correct use of both Optional types and Sum types (a.k.a. Union types) a type system that is powerful enough is essential. Moreover, a convenient syntax is also important.
In my opinion, besides being passed as arguments of functions whose parameters are declared as having the corresponding Optional or Sum type, there is only one other permissible use of values of such types.
Variables of an Optional type shall be allowed in the Boolean expression of an "if" or equivalent conditional statement/expression, while variables of a Sum type shall be allowed in an expression that tests which is the current type in a select/case/switch or whatever is the name used for a conditional statement or expression with multiple branches.
Then in the statements or expressions that are guarded by testing the Optional- or Sum-type variable, that variable shall be used as having the corresponding non-optional type or the type among those possible for a Sum type that has been determined by the test.
This syntax ensures that such variables will not be misused, while also avoiding the excessive and unhelpful verbosity that exists in some languages.