How to make Vim display colors as indicated by color codes?

Two answers:

A short one: you want to use the vim script AnsiEsc.vim. It will conceal the actual ANSI escape sequences in your file, and use syntax highlighting to color the text appropriately. The problem with using this in a pager is that you will have to make vim recognize when to use this. I am not sure if you can simply always load it, or if it will conflict with other syntax files. You will have to experiment with it.

A long answer: The best you can hope for is a partial non-portable solution. Less does not actually understand the terminal escape sequences, since these are largely terminal dependent, but less can recognize (a subset of) these, and will know to pass them through to the terminal, if you use the -r (or -R) option. The terminal will interprets the escape sequences and changes the attributes of the text (color, bold, underline ...). Vim, being an editor rather than a pager, does not simply pass raw control characters to the terminal. It needs to display them in some way, so you can actually edit them. You can use other features of vim, such as concealment and syntax highlighting to hide the sequences and use them for setting colors of the text, however, it will always handle only a subset of the terminal sequences, and will probably not work on some terminals.

This is really just one of many issues you will run into when you try to use a text editor as a pager.

Now with vim 8 you can use terminal mode :terminal and then in that terminal do cat myfile and go back to normal mode with Ctrl-w N. This will display ANSI color codes correctly. By automating these steps and reading from standard input instead of a file, it should be possible to use vim to replace less.

Install the vim plugin Improved AnsiEsc and put the below on your .profile/bash_profile/zprofile and you are good to go.

export PAGER="vim -R +AnsiEsc"