Well, the text box is a form control, it's not really supposed to be used like this. We have to work with the limitations of what the browser wants to do with form controls.
1) I wouldn't expect drag+drop to work with a textbox, since the browser handles input to form controls
2) It seemed to work OK here, but the text boxes lagged behind a bit (I wouldn't describe it as 'wiggling', just following closely). Again, we can't fix this, the browser draws the sprite earlier than it moves the textbox.
3) This is intended: the Pin is effectively doing 'always set position to text box', which will override any dragging and dropping.
4) The browser does this, to fit the font of the text inside the textbox. Again, nothing we can do, except you could try changing the text box font with CSS.
I don't think any of these are issues we can fix I'm afraid.