You should use Developer Studio for debugging, as it can decode the AT command and development information correctly. Development mode is used by Developer Studio to get traces from the device for debug (please refer to Developer Studio documentation for more details).
I went to the terminal because M2M Studio is failing with a known bug where you cannot get status at first try(in my case, neither at first, nor at any try) and you cannot use almost every functionality of target status, so it’s enough for me to see the output of my apps on the terminal.
No, only additions trace and debug information that Developer Studio uses. Your normal serial communications will still come through in production mode, and you can still send and receive AT commands.