Sharepoint online: how to retrieve the set of terms in SPFX to use in a drop-down selection?

The easiest way is to use the PnP reusable controls taxonomy selector. If you want to do it in the properties panel, you can also use the PnP PropertyFieldTermPicker property controls.

Both controls are relatively simple to add to your project and you can use the links above to see how to add packages, import declarations and examples of how to use them.

Even if those controls are not exactly what you are looking for, they are completely open source, so you can borrow the code and see examples of how it was done.