Improve chat message formatting

[sansari]

Two issues:

1. Sometimes the LLM feedback seems to have Markdown formatting, but we do not render in Markdown. We should. Example:

2. When the LLM is doing multiple steps of work, it shows a simple message to summarize the work it is doing. However, when there are multiple of those in a row, they do not seem to have any spacing between them, just a line break. We should give them a line of space between each one.