I'll create a Notion-like note-taking application with blocks and a bubble bar for adding different elements. This will include movable blocks, text formatting, and support for various content types.

This Notion-like editor includes:

Key Features:

1. Block-based editing - Create and manage different types of content blocks
2. Bubble bar - Appears when text is selected to apply formatting

3. Multiple block types:

   • Text paragraphs
   • Headings (H1, H2, H3)
   • Bulleted and numbered lists
   • Images
   • Dividers

4. Block operations:

   • Move blocks up and down
   • Delete blocks
   • Change block types

5. Text formatting:

   • Bold
   • Italic
   • Highlighting
   • Links

How to Use:

1. Click on any block to edit its content
2. Select text to see the formatting bubble bar
3. Use the block type dropdown (document icon) to change block types
4. Use the arrow buttons to move blocks up and down
5. Press Enter to create a new block
6. Click the "Add a block" button at the bottom to add more content

The editor supports markdown-like syntax for formatting:

• **bold text** for bold text
• *italic text* for italic text
• ==highlighted text== for highlighted text
• [link text](url) for links

You can extend this with more block types and formatting options as needed!

I'll adjust the block sizing to be more compact and move the bubble bar outside each block as requested.

I've made the following changes to address your feedback:

1. More Compact Blocks

• Reduced the height of paragraph blocks to be more compact
• Made blocks fit their content with minimal padding
• Paragraphs now occupy a single line by default with min-h-[1.5rem]
• Reduced spacing between blocks

2. Bubble Bar Outside Each Block

• Moved formatting options directly into each block
• The formatting buttons now appear when you hover over or select a block
• They're positioned to the right of each block for easy access
• Kept the original bubble bar for text selection formatting

3. Improved Layout

• Made the grip handle more compact and vertically centered
• Arranged all the action buttons in a single row for better space efficiency
• Reduced the size of buttons to make them less obtrusive

Now each block is more compact and has its own formatting options that appear when you interact with it, making it easier to format content without having to select text first.