Lets see;
Seeing what I am actually writing: Most telnet clients support "local echo". This allows you to see your input when the remote service does not provide "remote echo". Putty supports this.
Correcting my input with back and del:
When keymapping is properly setup, you should be able to use the backspace character to remove the last character(s) one by one. As I roughly recall, this should be set to Control-H. Or you could see the next paragraph regarding putty.
Sending my input only after I pressed enter:
This is not a normal behaviour for telnet terminals. Many terminal applications expect each key event to be sent instantly, such as providing remote support for backspace (when using editors like pico, joe, vi) and various meta characters. However, atleast putty does support this behaviour (configurable).
Up button:
Sorry, but not even the almighty putty can do this. Might try googling for a telnet client with "command history", though you'll most likely end up with a bunch of MUD clients (as it's more "native" for them to have all these kinds of features). Perhaps something like this one (
http://www.lolindrath.com/dragonsong/ ) could be tweaked to your likings?