Script Editor - resize the output pane

We have no control over the AppleScript Display Dialog window -- we can only set its contents. If you want more control, then some options are:

Since you already have KM, I'd suggest Custom HTML Prompt action. I believe it provides more options and control, and is probably easier to learn, especially if you already know some HTML and JavaScript.

Here's an example of calling it from AppleScript:
Demo Using KM Custom HTML Prompt with AppleScript

There are many other example of HTML Prompt in the forum.
See Topics tagged with "html_prompt"

Questions?