"If I underline and strike out passages in a book I own can I sell it to a used-book store? Can they sell it to someone else? Is that "distribution"?"
It is the same copy of the book, you see. The book is not copied onto new paper. That said, you'll find that underlines and strike-outs will pretty much guarantee that the used book store will not buy it in the first place.
There are hundreds of such books at the local store that sells used college textbooks.