[Feature]: improve merge conflict handling

[gsxdsm]

Feature Area

UI/UX (User Interface)

Priority

Nice to have

Problem Statement

Merge conflicts are now detected and can be resolved with AI, but the experience still feels broke - hard to see the conflicts and continue with a merge manually. Do a deeper investigation and fixes here

Proposed Solution

Better merge conflict editor

Alternatives Considered

No response

Use Cases

No response

Mockups/Screenshots

No response

Additional Context

No response

Checklist

• I have searched existing issues to ensure this feature hasn't been requested already
• I have provided a clear description of the problem and proposed solution