In regards to replacing the text area with an HTML editor you would need the HTML Editor extension to do this. To add it you would just select the text area then insert the HTML Editor onto the page.
For your update page not finding the record what is the URL of the link you click on to get to the update page? It should have the id of the record as a URL parameter in it, if it does not then an error like this can occur. After you update an item are you able to go to the detail page for that item and see the details there?
