Improve setup and local verification observability

[codetea-ping999]

Goal

Make local setup and verification failures easier to diagnose so contributors can recover quickly.

Scope

• setup.sh
• scripts/verify_local_stack.py
• README.md if setup instructions need to be updated

Background

The project already has a good local setup and verification story, but some install steps suppress output too aggressively. This makes failures harder to debug for first-time contributors.

Required changes

• Improve shell safety in setup.sh (for example, stricter error handling)
• Make failed pip install / npm install steps easier to diagnose
• Ensure setup output remains readable in the success path
• Review whether verification failure messages in scripts/verify_local_stack.py can provide clearer next-step guidance
• Update README setup notes if behavior changes

Constraints

• Preserve the existing happy-path flow
• Do not remove the convenience of one-command setup and verification
• Keep the scripts suitable for local developer use

Acceptance criteria

• Setup failures expose enough detail for debugging without requiring script modification
• Verification failures clearly indicate which stage failed
• README remains consistent with the actual setup/verification behavior

Validation

• Run ./setup.sh in a clean environment or simulate dependency failure paths
• Run ./venv/bin/python scripts/verify_local_stack.py --start-api
• Confirm that failure output points to the relevant step and command