How do you go about selecting lights in "r_editlights 1" mode? Is there a special key you press to lock in so you can edit it.

Aim at the light like you do for a player, you will see the light properties in the board at the top right. Now you can edit it with the r_editlights_edit command.

is this done in radiant notepad or in game?

It can all be done in game.

r_editlights_help will give you some more hints..
Of course entered into the ingame console.