Would it be possible to have this work in emacs internally, like a package? (Not external shell commands)

Interesting. Thanks for sharing.

yes. emacs is a fully-functional programming platform, so the answer is "yes".

I'm sure it isn't fast enough to display video like that.

Vterm, small fixed point font, good to go. Why make a package to avoid it?

The sweet thing with emacs is, you could use an xwidget to have a full fledged video-player inside emacs, no need for terminal pixel graphics.

You could use an xwidget to play it, with hw acceleration even