CSS Position not highlighted or suggested for autocomplete.

Did you select CSS3 in the parser settings?
"Position" is still not a part of CSS3 (and whole CSS3 is not a standard at all)
For further details on what is included into CSS3, please check this web: http://www.w3.org/TR/CSS/#css3

The position attribute is on that page.

If CSS3 is only meant to build or replace on CSS2.1 features, is there a replacement for positioning?

I didn't find it in the CSS3 tables. Because all other CSS2 attributes were trasferred to CSS3, we concluded -- it's on purpose and didn't add position to the definitions.
But it does not mean that you can't do this yourself. Check %APPDATA%\nusphere\config\phped.rel