I think it would be great if you could annotate "Submitted Text" as well as submitted files. It doesn't make sense to be able to annotate only a file. I would also propose that you be able to simply generate a "comment" that is not necessarily an annotation. I guess you can do that through the comment box at the top, though I'm not sure that's quite right. Another question is how is the student notified that you have made a comment or annotation? Does that happen automatically? Could you have a "notify student" button that either uses the internal messaging system and/or is a mailto: link to their email address?