[Good First Issue]: fix make setup failure from missing tests/requirements.txt

[ambicuity]

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👾 Task Description

make setup currently fails because the Makefile references a file that does not exist:

• File: Makefile
• Line: setup target runs $(VENV_PIP) install -r tests/requirements.txt
• Current state: there is no tests/requirements.txt in the repository

This creates a broken first-run experience for new contributors following CONTRIBUTING.md.

Please update the setup flow so it installs test/dev dependencies from a real, maintained source.
A good fix is to use project extras from pyproject.toml (for example .[dev]) or another single canonical source.

Also update the setup explanation in CONTRIBUTING.md so docs match the command behavior.

Area touched:

• Makefile
• CONTRIBUTING.md

✅ Acceptance Criteria

• make setup no longer references a missing tests/requirements.txt file
• Dev/test dependencies (including pytest + pytest-cov) are installed by setup
• CONTRIBUTING.md setup instructions match the updated command behavior
• Existing tests still pass (make test)
• PR is linked to this issue with Fixes #<number>
• PR title follows Conventional Commits format