yasnippet is a particularly good implementation of Textmate's snippet syntax for Emacs. With that you can import all of Textmate's snippets. If you install it then, this snippet that I wrote should do what you want:
(defun wrap-region-or-point-with-html-tag (start end)
"Wraps the selected text or the point with a tag"
(interactive "r")
(let (string)
(if mark-active
(list (setq string (buffer-substring start end))
(delete-region start end)))
(yas/expand-snippet (point)
(point)
(concat "<${1:p}>" string "$0</${1:$(replace-regexp-in-string \" .*\" \"\" text)}>"))))
(global-set-key (kbd "C-W") 'wrap-region-or-point-with-html-tag)
EDIT: (Okay this is my last attempt at fixing this. It is exactly like Textmate's version. It even ignores characters after a space in the end tag)
Sorry I misread your question. This function should edit each line in the region.
(defun wrap-lines-in-region-with-html-tag (start end)
"Wraps the selected text or the point with a tag"
(interactive "r")
(let (string)
(if mark-active
(list (setq string (buffer-substring start end))
(delete-region start end)))
(yas/expand-snippet
(replace-regexp-in-string "\\(<$1>\\).*\\'" "<${1:p}>"
(mapconcat
(lambda (line) (format "%s" line))
(mapcar
(lambda (match) (concat "<$1>" match "</${1:$(replace-regexp-in-string \" .*\" \"\" text)}>"))
(split-string string "[\r\n]")) "\n") t nil 1) (point) (point))))