If it's 2D art, then animation is sprite by sprite (or frame by frame). I think a good was to do it is to draw the sketches for each frame first, and then continue with drawing the actual detail, but it's all about preferences.
If it's 3D art, then you can use bones and stuff.
Note that you can also use some bone tool for 2D (I believe Adobe Flash has the feature), but I don't know of any example where that has turned out be artistically pleasing.

I am always willing to learn new things. I go to a small college and in my spare time I work on this idea I have and just need help for the next step after the design doc. Any advice at all will be greatly appreciated!

My first advice is, don't start at the top.

That is, i.e. don't target the next big MMORPG with superb visuals and supreme sandbox gameplay. The reason is, that you will most likely tone your features down over time, which is a very frustrating, expensive (you will throw a lot of work over board) and long experience (your first team members will drop out when there's no progress or motivation).

Therefore start at the bottom (i.e.: I will make a roguelike/ascii single player rpg) and try to idenify parts where you can improve the design/visuals immediatly using your own skills or some skills of your team members. This has the advantage, that you gain experience while going along, experience what it needs to archieve even small goals, and got a major motivation boost after completion of the first goals.

Therefore my second advice is, think about the lowest possible implementation of your basic game idea (reduces content, reduces features) and prototype it (few month), make a retrospective of your development process (what worked, what went wrong), plan your next iteration and start over again (more formal: SCRUM).

iPhone is a very specific platform though. PC development is often much easier than desktop development at first.