How to Implement a Rich Document Editor for iPhone

I am just starting out on a new iPhone / iPad development project and I need to display a document with rich styled text (possibly with inline images). The user touches the document by dragging and dropping to select single words or multi-line text. When the text is highlighted, a context menu will appear allowing them to change the highlight color or add bullet notes (or other various bits of structured metadata).

If you are familiar with adding comments to a Word document (or annotating a PDF file), then this is the same. But in my case, a typical user would spend many hours in an application adding thousands (in some cases, tens of thousands) of small annotations to the central document. All of these bits of metadata will be stored locally pending synchronization with the remote web service.

I've read other tips where developers suggest creating a UIWebView control and passing an HTML string to it. But that seems pretty awkward, especially with all the context sensitivity I want to include.

Anyway, I'm new to iPhone and Objective-C development, although I have ten years of software development experience using different languages ​​on different platforms, so I don't worry about getting my hands dirty with new functionality from scratch.

But if anyone has experience creating a similar component, I am interested in learning strategies for including this kind of markup and document annotation.