Not Kim but I'll pop in with the answer anyway.

Text Leading is the spacing between lines of text (i.e. single spacing, double spacing). So Adobe added a little better handling of text in PSE3 but not Text Box... which I would LOVE to have.
To deal with the non-wraping text in PSE, I usually write up my journaling in Word and then adjust the margins so that I have a similar area for text. Next I add carriage returns at the end of each line. Finally I copy and paste it all into PSE. I often have to adjust the margins again and redo do the carriage returns, but this way is easier FOR ME then trying to deal with the text directly in PSE. The text never seems to update quickling in PSE for me.

I'm not sure if that's my issue or the computer's. LOL
HTH!