Mirage, you came to the right place with this question.
Quite honestly, there’s a number of different ways the target is painted. The most commonly used would be, in no specific order:
[ul]
[li]Self-Designation[/li][li]Forward Observer[/li][li]Alternate Designation[/li][/ul]
Self designation, which I believe to be the most commonly used method of delivery, requires a rather advanced avionics package. A good example of this sort of system, and in fact, the system that I worked with in operations Deny Flight, Deliberate Force, (ad nauseum) was the LANTIRN system (Low Altitude Navigation and Targeting InfraRed for Night), for my purposes used on F-16 C&D models, as well as the F-15 E. LANTIRN, in essence, replaced the Pave Tack system, used on F-4 and F-111 jets.
With the LANTIRN system, the pod has the ability to auto-track the target, as well as a manual steer by the weapons operator. The laser splash, tracked by the bomb, isn’t a small dot by any means. Also, the laser is not continuously fired, rather used at specific timesto point the bomb in the proper direction. Were the operator to continuously fire, the trajectory would be off, and the bomb will fall short.
Aircraft such as the A-10 use a smaller system, without many of the advanced avionics features. Read here about Pave Penny, a system which is beginning, in my opinion, to become obsolete.
Pave Penny systems would necessarily rely upon a forward observer or alternate designation (e.g. a dude on the ground wth a laser, or another jet with lasing capability) to illuminate the target.
And 5000 feet up? peanuts 