Yep, this is a difficult problem. I wrote extensively how I managed to solve this by creating my block editor from scratch using Qt C++ and QML[1]. I faced similar issues - selection between discrete blocks, showing the underlying Markdown under the cursor, varying delegate sizes, etc.

I'm using what I learned to create a native LLM client with a streaming Markdown parser[2].

[1] https://rubymamistvalove.com/block-editor

[2] https://www.get-vox.com