It *might* be that the Java framework, which is responsible for the UI, is fully agnostic to the resolution (but in fact, I'm a bit sceptical about this). If this was the case, you could try to create a modified Linux kernel that offers a framebuffer device with a resolution set to fix your problem. But it would be a hacky mess to get there, admittedly.
As I said, the other part would be the Java framework. You can decompile it, but it has the names mangled. So this is a hacky mess, too.
Last option might be ebook settings. Maybe you can use Calibre or another tool to modify the ebooks instead of the device. However, I don't know if the Mobi format allows for individual settings of vertical margins. Maybe some format-guru knows more?
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