I'm kinda working in a remotely similar situation. You can set the SDL renderer to null in the command line, so it doesn't spawn a new window. If by session, you mean have DOSBox output text directly to the executing shell, then I'm pretty sure you can't as DOSBox renders graphically, even when it's text. At least, with the stock build. Dunno about SVN versions.
I have a question for you: Are you using the socket inheritance system in DOSBox? Because, if you are, I'd like to know if you had a problem with DOSBox not taking input, but outputting text and graphics back to the client. I'm not running linux on my server, but if you have had that problem or can provide me your command-line/config files/LORD config info, it may help me.
Sorry, not trying to hijack your thread, but you are the 2nd person I've read about attempting something like this, but your post actually sounds like it's working, but you're just trying to take care of the host activity.