**Core Concept:** The question is comparing two types of inflammatory bowel diseases (IBD) - Ulcerative Colitis and Crohn's Disease. Both conditions cause inflammation in the gastrointestinal tract, but they have distinct patterns of involvement.

**Why the Correct Answer is Right:** Crohn's disease typically affects any part of the gastrointestinal tract from the mouth to the anus, often causing transmural inflammation (inflammation that extends through all layers of the affected tissue). In Crohn's disease, the inflammation tends to be patchy, non-contiguous (occurring in non-adjacent areas) and skip-like (skipping areas between affected regions).

**Why Each Wrong Option is Incorrect:**
A. This option refers to the "Mucosal healing" in both diseases, which is not a morphological feature. Morphological features indicate the appearance of the affected tissue or organ.
B. This option discusses the "Pan-mucosal inflammation" which is a feature of both diseases, not specific to either.
C. This option refers to "Transmural involvement", which is a feature of both diseases, not specific to either.
D. This option mentions "Mucosal ulcers", which is a feature of both diseases, not specific to either.

**Why Option E is Right:** Option E states that "Involvement of terminal ileum" is a key morphological feature of Crohn's disease. In Crohn's disease, the terminal ileum is commonly affected.

**Why Each Wrong Option is Incorrect:**
A. Mucosal healing can be present in both diseases, so it is not specific to Crohn's disease.
B. Pan-mucosal inflammation is a feature of both diseases, not specific to either.
C. Transmural involvement is a feature of both diseases, not specific to Crohn's disease.
D. Mucosal ulcers are a feature of both diseases, not specific to Crohn's disease.

**Clinical Pearl:** Understanding the morphological differences between Crohn's disease and ulcerative colitis can help in arriving at a correct diagnosis, as well as guiding treatment decisions. In Crohn's disease, terminal ileum involvement is common, while in ulcerative colitis, the inflammation is limited to the colon and rectum.