Running ModelSim from within Nios II IDE (AN351)

I've run through the tutorial for generating simulation files for a Nios II processor design using the app note AN351, and have noticed that to create a "gateway" from the simulator to the terminal window, you must have the Nios II IDE app running.

Why is this? Is this because the alias is set to run the nios2-terminal, and this app needs to have Nios II IDE running?