docs: improve dev docs for extension (#4217)

Author: benfdking

docs/development.md

@@ -1,47 +1,103 @@
 # Contribute to development
-SQLMesh is licensed under [Apache 2.0](https://github.com/TobikoData/sqlmesh/blob/main/LICENSE). We encourage community contribution and would love for you to get involved.
+
+SQLMesh is licensed under [Apache 2.0](https://github.com/TobikoData/sqlmesh/blob/main/LICENSE). We encourage community contribution and would love for you to get involved. The following document outlines the process to contribute to SQLMesh.
 
 ## Prerequisites
+
+Before you begin, ensure you have the following installed on your machine. Exactly how to install these is dependent on your operating system.
+
 * Docker
 * Docker Compose V2
 * OpenJDK >= 11
 * Python >= 3.9 < 3.13
 
-## Commands reference
+## Virtual environment setup
+
+We do recommend using a virtual environment to develop SQLMesh.
+
+```bash
+python -m venv .venv
+source .venv/bin/activate
+```
+
+Once you have activated your virtual environment, you can install the dependencies by running the following command.
 
-Install dev dependencies:
 ```bash
 make install-dev
 ```
+
+Optionally, you can use pre-commit to automatically run linters/formatters:
+
+```bash
+make install-pre-commit
+```
+
+## Python development
+
 Run linters and formatters:
+
 ```bash
 make style
 ```
+
 Run faster tests for quicker local feedback:
+
 ```bash
 make fast-test
 ```
+
 Run more comprehensive tests that run on each commit:
+
 ```bash
 make slow-test
 ```
-Install docs dependencies:
+
+## Documentation
+
+In order to run the documentation server, you will need to install the dependencies by running the following command.
+
 ```bash
 make install-doc
 ```
-Run docs server:
+
+Once you have installed the dependencies, you can run the documentation server by running the following command.
+
 ```bash
 make docs-serve
 ```
+
 Run docs tests:
+
 ```bash
 make doc-test
 ```
+
+## UI development
+
+In addition to the Python development, you can also develop the UI.
+
+The UI is built using React and Typescript. To run the UI, you will need to install the dependencies by running the following command.
+
+```bash
+npm install 
+```
+
 Run ide:
+
 ```bash
 make ui-up
 ```
-(Optional) Use pre-commit to automatically run linters/formatters:
+
+## Developing the VSCode extension
+
+Similar to UI development, you can also develop the VSCode extension. To do so, make sure you have the dependencies installed by running the following command inside the `vscode/extension` directory.
+
 ```bash
-make install-pre-commit
+npm install
+```
+
+Once that is done, developing the VSCode extension is most easily done by launching the `Run Extensions` debug task from a Visual Studio Code workspace opened at the root of the SQLMesh repository. By default, the VSCode extension will run the SQLMesh server locally and open a new Visual Studio Code window that allows you to try out the SQLMesh IDE. It opens the `examples/sushi` project by default. To set up Visual Studio Code to run the `Run Extensions` debug task, you can run the following command which will copy the `launch.json` and `tasks.json` files to the `.vscode` directory.
+
+```bash 
+make vscode_settings
 ```