Maybe I'm missing the setting, but my logs in the Observability window are always being shown in UTC, despite the fact that I'm saving these logs as MST. Where can I change this setting or determine how the date is displayed (would like it similar to how its displayed in Discover window, see pics below)
the Logs UI doesn't interpret the field value but just displays it as it is. So you're seeing a ISO 8601 string because that's what Elasticsearch returns for the field. Customizable formatters for columns are in the backlog somewhere.
In contrast, Discover uses the field formatter defined in the index pattern and therefore parses and re-formats the date for the configured locale and timezone.
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