As for your first question with the CSV example from Stack Overflow. Embedded newlines mean those M and J reversed symbols (\r and \n characters) in CSV cells. These become embedded in a single line when you switch to a CSV mode, while separated into multiple lines when you switch to the Normal Mode. Does this answer your question?
As for the second question, you should use “version(.|[\r\n])+5” for the regular expression, or check the “Regular Expressions “.” Can Match New Line Characters” check box in the Search tab of the Customize dialog box.