I wanted to offer that (if you are "C handy") writing your own shell is a super informative exercise. We had to write our own shell in my operating system class at GT and I actually got it working well enough that I could "exec ./myshell" and use it for some day to day stuff. I felt empowered
iTerm and Terminal are pieces of software emulate a physical terminal environment. They take the output of programs/shells output characters and control codes to render text, clear the screen, etc.
The terminal emulator receives keyboard input via your operating system, and passes it to the shell program via stdin.
The shell is responsible for prompting you and handling whatever you type.
For example the “$ “ waits for next character from the terminal emulator until you hit newline.
The shell is responsible for parsing your input, executing any child programs “ls” for example, outputting their content to stdout, and prompting you again.
I tried to dig up the course but naturally things are wwaaaaaaay different now than back in my day. But OCW has something similar https://ocw.mit.edu/courses/6-828-operating-system-engineeri... and does ship the source files https://ocw.mit.edu/courses/6-828-operating-system-engineeri... although I have no idea why that's only present in a graduate level class