Hi R A,
Personally, after using an essay question in a quiz one time, I never did it again. Too many clicks to suit me, especially since I wanted my students to revise their answers, which of course, I would then have to "look" at again, which required even more clicks. On more than one occasion, during QA testing for a new Moodle, I have worked on tests for essay questions, and they still require lots of clicks.
After that one time I started using the Journal activity, but it does have a limitation whereby there is just the one page/entry so the student cannot keep the original text as a separate entry, while making a new entry with corrections and additions. To "fix" that problem, I modified Journal and created a new version named, Diary, it let's me overcome that limitation. It can be used just like Journal, but can also be set to allow for multiple, separate, entries. Editing can be limited to just the current day, or set to allow editing any entry. Entries can be limited to just one per day, or you can edit the creation time to add multiple entries per day.
Might not be something you want to try, since the teacher cannot directly markup the students text, but you can give them feedback with directions on what to fix. They can then add a new entry via copy and paste, or by editing the date/time, and make corrections as needed.
To me, the biggest advantage of using Journal or Diary, is that I get to see the current entry for all students on one page and saves me having to make a whole bunch of clicks. The "scroll of death" possibility for the page can be limited by using groups.
Hope this helps.