What you ask for should be reasonably straightforward in jQuery-
$(function() {
$('#myAnchorId').click(function() {
var areaValue = $('#area').val();
$('#area').val(areaValue + 'Whatever you want to enter');
});
});
The best way that I can think of highlighting inserted text is by wrapping it in a span with a CSS class with background-color
set to the color of your choice. On the next insert, you could remove the class from any existing spans (or strip the spans out).
However, There are plenty of free WYSIWYG HTML/Rich Text editors available on the market, I'm sure one will fit your needs