terminal-emulator is for OpenFirmware's text output, not for Mac OS. I know there's serial terminal software for classic Macs, but I don't believe there's any such beast as a command-line shell (except the Unix shell built into MPW for build purposes.)
Just curious, what do you need the terminal for? I'm a command-line junkie myself, but OS9 really isn't designed to use one...
Junkie though you be, on classic Mac OS you just gotta play by the no-command-line rules...