Update to latest webpack-dev-server

What does this MR do and why?

This fixes a bunch of dependency audit problems. Luckily the new webpack-dev-server is compatible with webpack v4 and webpack v5.

Updating this separately from the rest of webpack seems like a step in the right direction. So far there are no problems with the webpack dev server locally and HMR and all these things seem to work perfectly.

Coincidentally this adds a few settings that will be useful for better gitpod support:

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