Textareas are great because of some built in functionality (scrollbars). How can I format <spans> of text inside of the <textarea>?
Answer
If you need to customize your textarea, reproduce its behavior using another element (like a DIV) with the contenteditable attribute.
It's more customizable, and a more modern approach, textarea is just for plain text content, not for rich content.
<div id='fake_textarea' contenteditable></div>
The scrollbars can be reproduced with the CSS overflow property.
You can use this fake textarea in a form normally, i.e: if you have to submit its content through POST method, you could do something like(with jQuery):
<input type='hidden' id='fake_textarea_content' name='foobar' />
...
$('#your_form').submit(function()
{
$('#fake_textarea_content').val($('#fake_textarea').html());
});