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Yes such-a-thing-is-possible: The DEC VT330 (for example) allowed font upload, had multiple font sizes, and even mouse support.

There once was a program called https://en.wikipedia.org/wiki/ManaGeR which appears at first blush to be some kind of X11-competitor, except it was using the VT330's regular terminal capabilities to do those fancy pixel-patterns and fonts, and so there's just some weird VT escape sequences you've never heard of in there.

You can also use SIXELs if you want even more control, and you can readily see such things in action because qemu can (in 2026) send its graphical VGA display into a sixel terminal, but in the 1980s such a thing would not have been performant (probably something like 3 frames per minute) because the VT330 was slow, and such a thing would not be popular you would "lose the text" at some layer which would be as inconvenient as using any other graphical application.

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