Highlighting Text

Is there a way to highlight text in the iOS apps?

Yes. Select the text and either:

Use the formatting palette-

Or tap the paint tube looking icon in the extended keyboard row which gives you the ability to choose a color-

You can also use either method without selecting text. Your subsequent typing will be highlighted until you disable highlighting.

There is also a keyboard shortcut, which uses the last colour used (yellow by default): Shift-Cmd-H.