Ahaa......
OK, added the JTAG UART to the system, I can now compile and run the system with the JTAG UART. The UART appears to send characters, however they don't appear on the "console" window in the IDE.
However, if I do Run-Debug, and select "jtag_uart" under "Target Connection", I now get an error dialog saying "The NIOS II Terminal communication device 'jtag_uart' does not exist in the current SOPC Builder system file".
Closed and restarted the NIOS IDE, then in the debug dialog, I used "Load JDI File". That seemed to overcome the previous problem, now on the console the following appears:
nios2-terminal: There are no JTAG UARTs available which match the --device and
nios2-terminal: --instance options you provided.
Hmmmm.