I mean, we've never seen any spells for revealing ghosts, nor have we seen invisible ghosts that I can recall.
I know he's not a ghost but still, it seems to follow from the evidence provided by the writer.
Even if he possessed someone, he wouldn't just be able to waltz into the Dursleys' place and do that until Harry was seventeen, so the PIS idea doesn't really work.Because "Lucius Malfoy (or whoever) sets Harry Potter on fire when he's two years old" does not make for a very good story.
He's clearly not too weak to travel all the way to Albania. <_<Also, because IIRC, he was even weaker when he'd just gotten killed than he was by the time he showed up in Book 1.
Unless you're saying that it takes him years to gain enough strength to possess people, which I admit is possible, but that doesn't exactly help his cause in the Arena.