diff --git a/apps/api/static/app.js b/apps/api/static/app.js
index 96d247c..e4500ec 100644
--- a/apps/api/static/app.js
+++ b/apps/api/static/app.js
@@ -328,7 +328,7 @@ function resetTerminalConsole() {
   }
 
   if (output) {
-    output.innerHTML = '<span class="terminal-empty">Awaiting system diagnostics...</span><span class="terminal-cursor"></span>';
+    output.innerHTML = '<span class="terminal-empty">Awaiting engine logs...</span><span class="terminal-cursor"></span>';
   }
 
   if (status) {
@@ -383,10 +383,10 @@ function renderTerminalLogs(logs, traceId = null) {
       console.classList.add('terminal-console--complete');
     }
     if (output) {
-      output.innerHTML = '<span class="terminal-empty">No diagnostic logs available.</span><span class="terminal-cursor"></span>';
+      output.innerHTML = '<span class="terminal-empty">No engine logs available.</span><span class="terminal-cursor"></span>';
     }
     if (status) {
-      status.textContent = 'COMPLETE';
+      status.textContent = 'IDLE';
     }
     return;
   }
diff --git a/apps/api/static/index.html b/apps/api/static/index.html
index 2b8df75..b822704 100644
--- a/apps/api/static/index.html
+++ b/apps/api/static/index.html
@@ -129,7 +129,18 @@ <h2 class="panel-title">Validation Proof</h2>
           <span class="status-icon">◯</span>
           <span class="status-text">AWAITING PLAN</span>
         </div>
-        
+
+        <!-- Terminal Console (Engine Logs) -->
+        <div id="terminal-console" class="terminal-console">
+          <div class="terminal-header">
+            <span class="terminal-title">ENGINE LOGS</span>
+            <span class="terminal-status">READY</span>
+          </div>
+          <div id="terminal-output" class="terminal-output">
+            <span class="terminal-cursor"></span>
+          </div>
+        </div>
+
         <!-- Extracted Constraints (PR 2.1) -->
         <div id="constraints-section" class="constraints-section">
           <h3 class="section-title">Extracted Constraints</h3>
@@ -265,17 +276,6 @@ <h3 class="section-title section-title--error">Errors</h3>
           <span class="trace-text">View Validation Log</span>
         </button>
         <div id="trace-log-modal" class="trace-log-modal trace-log-modal--hidden"></div>
-
-        <!-- Terminal Console (Technical Logs) -->
-        <div id="terminal-console" class="terminal-console">
-          <div class="terminal-header">
-            <span class="terminal-title">System Diagnostics</span>
-            <span class="terminal-status">READY</span>
-          </div>
-          <div id="terminal-output" class="terminal-output">
-            <span class="terminal-cursor"></span>
-          </div>
-        </div>
       </aside>
     </main>
   </div>
diff --git a/apps/api/static/styles.css b/apps/api/static/styles.css
index df2c66c..29540d2 100644
--- a/apps/api/static/styles.css
+++ b/apps/api/static/styles.css
@@ -1299,15 +1299,18 @@ body {
 }
 
 /* --------------------------------------------------------------------------
-   Terminal Console (Technical Logs)
+   Terminal Console (Engine Logs)
    -------------------------------------------------------------------------- */
 .terminal-console {
-  margin-top: var(--space-lg);
-  background-color: #0a0a0a;
+  margin-bottom: var(--space-lg);
+  background-color: #050505;
   border: 1px solid #1a1a1a;
   border-radius: var(--radius-md);
   overflow: hidden;
   position: relative;
+  height: 200px;
+  display: flex;
+  flex-direction: column;
 }
 
 /* Scan-line overlay effect */
@@ -1320,8 +1323,8 @@ body {
   bottom: 0;
   background: repeating-linear-gradient(
     0deg,
-    rgba(0, 0, 0, 0.15),
-    rgba(0, 0, 0, 0.15) 1px,
+    rgba(0, 0, 0, 0.12),
+    rgba(0, 0, 0, 0.12) 1px,
     transparent 1px,
     transparent 2px
   );
@@ -1339,7 +1342,7 @@ body {
   bottom: 0;
   background: radial-gradient(
     ellipse at center,
-    rgba(16, 185, 129, 0.03) 0%,
+    rgba(16, 185, 129, 0.02) 0%,
     transparent 70%
   );
   pointer-events: none;
@@ -1351,45 +1354,50 @@ body {
   justify-content: space-between;
   align-items: center;
   padding: var(--space-xs) var(--space-sm);
-  background-color: #141414;
+  background-color: #0a0a0a;
   border-bottom: 1px solid #1a1a1a;
+  flex-shrink: 0;
 }
 
 .terminal-title {
   font-family: var(--font-system);
-  font-size: 0.625rem;
-  font-weight: 600;
+  font-size: 0.5625rem;
+  font-weight: 500;
   text-transform: uppercase;
-  letter-spacing: 0.1em;
-  color: #10b981;
+  letter-spacing: 0.15em;
+  color: #4a4a4a;
 }
 
 .terminal-status {
   font-family: var(--font-system);
-  font-size: 0.5625rem;
+  font-size: 0.5rem;
   font-weight: 500;
   text-transform: uppercase;
   letter-spacing: 0.05em;
   color: #10b981;
+  padding: 2px 6px;
+  background-color: rgba(16, 185, 129, 0.1);
+  border-radius: 2px;
   animation: status-blink 2s ease-in-out infinite;
 }
 
 @keyframes status-blink {
   0%, 100% { opacity: 1; }
-  50% { opacity: 0.5; }
+  50% { opacity: 0.6; }
 }
 
 .terminal-output {
   padding: var(--space-sm);
-  min-height: 100px;
-  max-height: 200px;
+  flex: 1;
   overflow-y: auto;
+  overflow-x: hidden;
   font-family: var(--font-system);
   font-size: 0.6875rem;
-  line-height: 1.6;
+  line-height: 1.5;
   color: #10b981;
   position: relative;
   z-index: 3;
+  scroll-behavior: smooth;
 }
 
 /* Custom scrollbar for terminal */
@@ -1402,7 +1410,7 @@ body {
 }
 
 .terminal-output::-webkit-scrollbar-thumb {
-  background: #1a1a1a;
+  background: #1f1f1f;
   border-radius: 2px;
 }
 
@@ -1413,9 +1421,10 @@ body {
 /* Terminal log lines */
 .terminal-line {
   display: block;
-  padding: 1px 0;
+  padding: 2px 0;
   opacity: 0;
-  animation: line-appear 0.2s ease-out forwards;
+  animation: line-appear 0.15s ease-out forwards;
+  word-break: break-word;
 }
 
 @keyframes line-appear {
@@ -1446,7 +1455,7 @@ body {
 .terminal-cursor {
   display: inline-block;
   width: 6px;
-  height: 12px;
+  height: 11px;
   background-color: #10b981;
   animation: cursor-blink 1s step-end infinite;
   vertical-align: middle;
@@ -1461,6 +1470,7 @@ body {
 /* Terminal states */
 .terminal-console--processing .terminal-status {
   color: #f59e0b;
+  background-color: rgba(245, 158, 11, 0.1);
   animation: status-pulse 0.5s ease-in-out infinite;
 }
 
@@ -1471,11 +1481,13 @@ body {
 
 .terminal-console--complete .terminal-status {
   color: #10b981;
+  background-color: rgba(16, 185, 129, 0.1);
   animation: none;
 }
 
 .terminal-console--error .terminal-status {
   color: #f43f5e;
+  background-color: rgba(244, 63, 94, 0.1);
   animation: none;
 }
 
@@ -1483,6 +1495,7 @@ body {
 .terminal-empty {
   color: #3f3f46;
   font-style: italic;
+  font-size: 0.625rem;
 }
 
 /* --------------------------------------------------------------------------