Edit commands in iTerm2 with standard OS text keyboard/mouse controls
I use the bash shell and do much of what you want. I use the mouse to select something and command-c to copy or command-v to paste. I can place the cursor wherever I want with mouse. Well it doesn't really move the cursor but I highlight what I want to copy or cut. The up and down arrows scrolls thru previous commands. Typing tcsh adds more functionality.