Maryana,
Undo and revert are specific actions. Undo does do the thing that i described, but it is more of a power user feature and what I'm hearing is that in practice undo is typically just used for the most recent edit which basically makes it the same as rollback except that rollback isn't offered to everyone and rollback is a one step process.
The difference between an edit and a revision is that the edit is actual atomic change, while the revision is the version of the document at the time of that change. I think on desktop we've been conditioned to think about them the same because we can display so much data, but on mobile displaying both edits and revisions together is quite challenging.
But the point is well taken that the most important use case is: The most recent change from the watchlist with a quick revert/rollback/undo functionality. We don't need to worry too much about reverting to versions from a long time ago, or complicated undo procedures for specific edits in the middle of a stream of edits.
Design: Maybe that means that in Watchlist we highlight the most recent changes somehow (maybe grouped by user) and then make rollback/undo only available for those changes for now. Same thing on article history page. This seams like a reasonable MVP.
Kenan