test1dellboy3> I am exploring python-mode on emacs. When I open foo.py
    test1dellboy3> in emacs and hit C-!, it starts the python interpreter in
    test1dellboy3> another window. Next, I execute -

    ...

That's not really intended to be used as an interactive session with all
sorts of bells and whistles.  If you want a true terminal emulator within
Emacs, try

    M-x terminal-emulator RET

You can do tab completion and command recall just like a normal terminal.
(In fact, you can run Emacs within Emacs using terminal-emulator.)

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