Is it possible to select Terminal output by using keyboard keys?
The terminal multiplexing program tmux has configurable keyboard commands for selecting text for the purpose of copying and pasting.  tmux is a very powerful addition to any terminal.  It has a high learning curve, but if all you want to do is copy and paste you can learn how in a matter of moments and it will stay completely out of your way until you are ready to take the next step.  tmux can be installed directly, or using a package manager such as Macports or Homebrew.