Basic formatting is supported in bibliographies at present, but must apply to the whole field (e.g. the whole title will be in italic).

Spacing, line breaks and indents are also supported.

Special formatting for individual words or characters within fields - such as SmallCaps, _subscript, ^superscript and italic - is not yet supported, though this should be possible in upcoming releases of the CSL. Here's a workaround which may help you for now.