From my experience Docker works fine. VS Code works well. You can install your own Terminal if you want.
Note for the demo in the video they ran Chromium inside the VM so localhost would work. Otherwise you need to use the penguin.linux.test domain which was pretty hard to find out about when they made that change. Another thing is you really should default to binding to 0.0.0.0:$PORT because that makes your life easier as well.
For those not enjoying MBPs and their keyboards the Pixelbook's keyboard is pretty good.
If I had to make a recommendation I'd say that getting a lower -end pixelbook would be a great buy. Not sure my i7 or extra SSD space has really been worth it.