Is there any application out there that allows you to type in text and it becomes html?
...by all means go and learn the basics of HTML (it isn't quantum mechanics, and all you need is a text editor, web browser and one of the many fine online guides - e.g.
http://www.w3schools.com) but if your motivation is "I need a website" rather than self-education, then the sensible routes these days are either:
1. If you want an 'off the peg' website with all the standard trimmings, use a 'content management' system (wordpress, drupal, joomla, various 'wikis' etc.) If you're not a Googlephobe, try Google sites - otherwise there are plenty of other (free or paid) hosting services for wordpress etc. No HTML required, and you solve the problem of how to host your site at the same time.
or 2. If you want something 'bespoke', go learn advanced HTML & CSS, plus Javascript and PHP, so you can either write your site from scratch, or produce custom templates for wordpress etc.
Dreamweaver does what you describe, but costs serious money. There are plenty of free 'WYSIWYG' HTML editors available (such as TinyMCE), but they are designed for web designers to integrate into their sites to provide user-friendly content editing, not as stand-alone applications (i.e. you need to know HTML and Javascript to get them working!)