IMHO, the current proposal (build from master) is fine.
I use many code editors. Applications treat the code highlighting mechanism in a different way, and more or less allow users to configure this process.
Sometimes it is just highlighting the tag itself, and other times the whole – from beginning to end, i.e. in the case of the cursor in the <html> tag, practically the entire document is highlighted.
Your current solution (last commits) is balanced enough for me to get used to it.
At first I wasn't sure if such a function was needed in Sigil, but I liked it already!
I understand your suggestion that the highlighting of the tagged text should work to a limited extent, but I am a visual learner, so if I could see it, maybe I would also like an alternative solution.
Personally, it doesn't bother me that all these attributes are highlighted, because my eyesight instantly covers the appropriate piece of code, I can also scroll through the text and make sure everything is fine.
I miss:
* the option to disable it, because I believe that there will be users who would like not to use this feature in Code View.
* probably, however, you can choose your own color for this text highlight – currently it is the background color for line numbers. In the default (light) mode, this is a great choice, but in the dark mode, I would probably experiment with a different color. I would love to listen to other users.