Are muffler systems and exhaust systems in cars different?

The exhaust system includes everything from the exhaust manifold and beyond to the final end of the tailpipe... lots of pipes, a catalytic converter, one or possibly two mufflers, etc. The muffler is just the part that surpasses (muffles) the noise.

Any leaks along the exhaust path could possibly get into the passenger compartment.

Have you considered having it repaired by the seller before completing the sale?

"Muffler" generally refers to only to the one single part of an exhaust system - the part that makes a car quieter. If the rest of the system is mechanically safe the car may be a bit louder than usual but not necessarily unsafe to drive.

The exhaust system is expensive to replace, and yes, CO leakage is an issue. Have a mechanic check the car over, and figure the exhaust system repair into the price. If it's the catalytic converters, you should probably walk away.