I'm a big fan of using wsltty. Everything works and it has very low input latency. I run tmux and terminal Vim in it every day for hours of coding.

Screenshots of my terminal and set up are in my dotfiles https://github.com/nickjj/dotfiles.

It looks exactly the same as xterm on my native Linux laptop.

I've even gone as far as running i3 through WSL1 / wsltty and it worked very well with 1 monitor. I stopped using it because I have 2 monitors, but if I had 1 monitor it would have been usable for day to day development.