How do I make text bold, italic or underlined in the editor? Is there a toolbar?

Yes, from version 1.9.15 there is a formatting toolbar above the text in the editor: Bold, Italic, Underline, Heading, Bulleted list, Numbered list, Quote, Center, Align right, Scene break, Undo and Redo. Select the text and click the icon; click the same icon again to remove the formatting. Ctrl+B, Ctrl+I and Ctrl+U work too (Cmd on a Mac). You will see small marks appear around your text, such as **two stars** around bold words: that is how the formatting is stored, and the marks never appear in your exported book. Heading and Quote applied to a few words in the middle of a paragraph move those words onto a line of their own, because a heading or a quotation is always a paragraph of its own.