Not all terminals come with image protocol support. Only a few do. One of them is Kitty, which developed its own image rendering protocol, the Kitty Image Protocol. Ghostty implements the same Kitty Image Protocol in the terminal so that you can view images right from the terminal.

Ghostty also has ligature support. Now what is the purpose of ligatures, and what is its use within the terminal?

If you are into coding, there are symbols that are a combination of two symbols. Let's say, "Not equal to", usually denoted as != but mathematically displayed as ≠ . Now, with a ligature supported terminal, you will get the proper symbol for this operation. See the difference for yourself.