[Fix] README formatting and improve backend setup documentation #509

Description

Problem

The current README contains several formatting inconsistencies and incomplete setup instructions which may create confusion for new contributors and users trying to run the project locally.

Issues Identified

• Mermaid architecture diagram is not properly wrapped inside a Markdown Mermaid block, causing it to render as plain text on GitHub.

• Project structure tree formatting is inconsistent in some sections.

• Backend setup documentation is incomplete:

  • Missing virtual environment setup instructions
  • Missing dependency installation steps
  • Missing Flask backend run command
  • Missing .env configuration guidance

• Some unnecessary development-related files/folders may require cleanup or clarification.

Expected Improvements

• Properly render Mermaid diagrams using:

graph TD
A[Frontend] --> B[Backend]
B --> C[Database]

• Fix project structure formatting for improved readability.

• Add detailed backend setup instructions including:

  • Creating and activating a virtual environment
  • Installing dependencies
  • Running the backend server
  • Setting up environment variables

• Review unnecessary development artifacts and improve repository cleanliness if required.

Benefits

• Improves onboarding experience for new contributors
• Makes local project setup easier and more beginner-friendly
• Enhances repository readability and documentation quality
• Maintains better project consistency and professionalism

Additional Context

I would like to work on this issue under GSSoC and contribute to improving the project documentation and developer experience.
Kindly assign this issue to me, @devanshi14malhotra .