I only applied to my dream schools so I knew that odds weren't in my favor.
After my recommenders submitted their recs (before I heard back from schools), I thanked each of them, sent nice thank you gift-cards, and reiterated how competitive this application season is going to be.... that's where I slipped in the possibility of reapplying next year.
If you are planning to stay at the firm for another year, I would definitely bring this up as soon as possible (if you are dinged across the board). You don't want your managers taking away your responsibilities because they think you are leaving in a few months. I also think you don't really have to phrase things along the lines of "getting dinged everywhere and staying at the firm." I would talk about how you thought long and hard about your choices and decided that staying with the company is the best option for you right now. Give them an impression that you chose the firm over business school. If they ask for details on your results, then you are going to have to tell them about the dings.. but you can also bring up not choosing to apply anywhere in R3 because you want to stay with the firm (how many of your managers will know that applying in R3 isn't a good idea for most people?).