How to correctly configure Fivestar module with a node reference?
You first need to go to path admin/structure/types/manage/product/fivestar and click the Enable Fivestar rating for the "vote" tag. For Full node display I choose Static display above node body because the voting widget will be on the Review form.

At admin/structure/types/manage/review/fields create a Node reference called Reference with a machine name field_review_reference. Add a field for Fivestar voting. Set the Voting target to Node Reference: field_review_reference. Under Reference Field Settings check the Product content type. At admin/structure/types/manage/review/fivestar the widget should NOT be enabled.

(edit: paragraph removed per suggestion of ericduran)

Now you can create another View with field to make a list of products that show fields from the product such as title, price, and image. Add the relationship Content: Vote results. Set Value type as percent, Vote tag as vote and Aggregations function as Average vote. Add the field Vote results: Value, set Relationship to Vote results, set Appearance to Fivestar Stars (display only).

That should be it.