It resides in its own directory, so deploy it on your website where it can be accessed by your webpages.
The example above assumes you have uploaded it into /ckeditor on your server.
Instead of a textarea that can only edit pure text, you can use CKEditor and replace the textarea with an editor. The data from the editor is retrieved as HTML text, so you can still save it and use it later without the CKEditor library.
When the button is clicked, an alert with the editor data will appear.
CKEditor in HTML mode. The user can highlight text and apply formatting of styles.
The resulting HTML is not neat, it will have extra spaces in the code, but visually it is good. You have the option of editing in raw HTML mode with a preview function. I'm not sure if you can hide or disable certain buttons - I have not tried this.