Monitoring and Observability Improvements

**Description:**
We need to enhance monitoring and observability across the system to ensure better visibility into application performance, uptime, and reliability. This includes implementing health checks, metrics, alerting, and tracing.

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#### ✅ Tasks

- [ ] **Health Checks**
- Add `/health` and `/readiness` endpoints.
- Ensure these endpoints cover key dependencies (database, cache, external APIs).
- Integrate with orchestration tools (e.g., Kubernetes, Docker) for automated restarts.

- [ ] **Metrics Collection**
- Implement collection of key metrics such as request latency, throughput, and error rates.
- Use Prometheus or an equivalent monitoring tool for metrics scraping.
- Visualize metrics in Grafana or a similar dashboard.

- [ ] **Alerting**
- Set up alerts for critical failures (e.g., API downtime, high error rate, CPU/memory spikes).
- Define clear alert thresholds and escalation policies.
- Integrate alerts with communication tools (Slack, Email, etc.).

- [ ] **Tracing**
- Add distributed request tracing to debug cross-service performance issues.
- Use tools like OpenTelemetry or Jaeger for tracing integration.
- Correlate traces with logs for comprehensive debugging.

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#### 🧠 Expected Outcome
- Faster incident detection and recovery.
- Improved system reliability and transparency.
- Simplified debugging for performance bottlenecks.
- Enhanced operational visibility for developers and DevOps teams.

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#### 📦 Affected Components
- Backend Services
- DevOps / Monitoring Infrastructure
- Logging and Tracing Middleware

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**Priority:** 🔴 High
**Type:** Enhancement
**Assignee:** _TBD_
**Milestone:** `Monitoring & Observability Sprint`

The issue names backend services, DevOps and monitoring infrastructure, and logging and tracing middleware, but no specific files or tests. Start by mapping those components and their existing operational hooks; done means the listed health checks, metrics, dashboards, alerts, and tracing integrations are implemented and their dependency coverage is verified.

Written by the indexing model from the issue text.