feat(libsy): add OTel metrics, tracing spans, and structured logging

.agents/skills/switchyard-codebase-exploration/SKILL.md

@@ -9,7 +9,9 @@ description: Use when modifying, debugging, reviewing, refactoring, renaming, re
 > `crates/switchyard-core`, `crates/switchyard-components`,
 > `crates/switchyard-server`, `crates/switchyard-translation`,
 > `crates/switchyard-py`, and `crates/*/tests`
-> directly when a change touches Rust.
+> directly when a change touches Rust. The libsy algorithm layer lives in
+> `crates/libsy` (core + `observability.rs` telemetry), `crates/libsy-protocol`
+> (conversation IR), and `crates/libsy-examples` (reference algorithms).
 > Direct PyO3 bindings for concrete components live under
 > `crates/switchyard-py/src/component_bindings/` with Python lazy exports in
 > `switchyard_rust/components.py`.

crates/libsy/Cargo.toml

@@ -15,11 +15,18 @@ rust-version.workspace = true
 async-trait = "0.1"
 serde_json = "1"
 futures = "0.3"
+# Metrics-only OTel API: instruments record through the host-installed global
+# meter provider. Pinned to the 0.32 line used across the workspace.
+opentelemetry = { version = "0.32", default-features = false, features = ["metrics"] }
 rand = "0.8"
 switchyard-protocol = { path = "../protocol" }
 tokio = { version = "1", features = ["full"] }
 tokio-stream = "0.1"
+tracing = { version = "0.1", default-features = false, features = ["std", "attributes"] }
 
 [dev-dependencies]
+# SDK + in-memory exporter to assert what the observability layer records.
+opentelemetry_sdk = { version = "0.32", features = ["metrics", "testing"] }
 switchyard-llm-client = { path = "../libsy-llm-client" }
 tokio = { version = "1", features = ["macros", "rt"] }
+tracing-subscriber = "0.3"