"With the habitats" is wrong. You would need to say "by the habitats." "Such variation can no doubt be explained by the habitats in which individual species have developed" is almost right, but a careful writer would not write it that way. The problem is that a habitat isn't a person and can't "explain" anything. A careful phrasing of the idea might be "Such variation can no doubt be explained as the response to differences in selective pressures, existing in the different habitats in which individual species have developed." However, this sentence is very long, and provides unnecessary detail which the reader can probably figure out for himself. "With reference to" solves the grammatical problem by making it vague who is doing the explaining! And it avoids the long sentence by not spelling out precisely how the difference in habitats can be used to explain the variation.

"Such variation can no doubt be explained with reference to the habitats in which individual species have developed." No, unfortunately, you can't just rearrange the sentence. Without the context of the sentence, it's not clear what "such variation" is referring to. However, let's look at the sentence. There are two clause, the main and a sub-clause: "Such variation can no doubt be explained" and "... with reference to the habitats in which individual species have developed." The first clause "such variation can no doubt be explained" would normally either stand alone, or be followed with 'by' and the explanation. In the sub-clause, "habitats in which individual species have developed" is a noun-clause, so the question is what is "with reference to" doing in this sentence? "can no doubt be" is a weaker form of "is" which is easier to defend! The 'with reference' is introducing something for the reader to 'refer to' or 'take into account'. So really the sentence can be reworded to say (more clearly, but less easily defended!): "Such variation is explained by taking into account (selection pressures of) the habitats in which the individual species have developed." (Where 'selection pressures' are the driving forces behind the development/evolution of individual species). I hope this helps.

"Such variation can --no doubt-- be explained *by inspecting* the habitats in which individual species have developed." "with reference" is not really redundant, just not quite the proper usage.