So the “terminal” is the basic CLI that you use in the single-user, text-based mode. Terminal emulators are graphical programs that run in multi-user, graphics-based mode, and they hook into the terminal and allow you to access it inside graphical sessions. Some examples would be alacritty, kitty, urxvt, konsole, or terminator
I’ve been daily driving Hyprland for almost a year now I think, my only complaint is that some of my electron apps act out a little bit (Discord won’t open links, etc). I don’t game as heavily as I used to, but I regularly am running Overwatch 2 around 200 FPS with no issues, and Bauldur’s Gate 3 is super smooth as well.