I read mostly in Kindle app on the iPad or the iPhone (this concerns bought both on and off Amazon).
Thanks to Amazon's ecosystem I can keep the books and the highlights in sync, export them (rather) easily and process whenever the need arises.
Highlighting
I highlight a lot. I use different colors for different types of highlights (ideas, links, quotes, useless but funny etc.).
I prefer to read on an iPad due to it's Apple Pencil support - it's way more precise than using finger on eInk.
If I want to add something from myself to the book notes, I use iPad's Scribble feature.