🎨 Palette: Documentation polish and improved API feedback

[google-labs-jules]

This PR implements a micro-UX improvement for developers using the REST API template and polishes the project's contributing documentation.

💡 What:

• Changed the generic Not found message to a more descriptive Item '{id}' not found in the REST API handler.
• Fixed spelling and phrasing in docs/CONTRIBUTING.md.

🎯 Why:

• Better error feedback during development and testing makes the API more intuitive and pleasant to use.
• Professional, typo-free documentation improves the project's quality and contributor experience.

♿ Accessibility:

• Improved the clarity of textual feedback for developers.

Verification:

• Ran uv run pytest (67 passed).
• Ran uv run mkdocs build (Success).

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PR created automatically by Jules for task 1375525680948056946 started by @amrabed

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