I've done some research into this in the past, and I would say: maybe, with some additional work. So far, it sounds like Jeremy is only touching the process of rendering letters from the font buffer, which holds the data imported from fonts.dat, to the HUD.
Internally, the game has three cached font sizes, which are never scaled (unless the in-game resolution is set less than the real screen resolution, in which case the entire HUD is scaled up by ddraw, rendered characters included). Instead of image scaling, the game picks between the three different font sizes for different elements of the HUD, depending on the HUD scale chosen. At HUD scale >= 1.5, it ends up picking the largest size for all elements - and it's this size that results in font clipping, for reasons I haven't been able to identify. (Even at HUD scales down to 1.25, some elements (such as the name of the targeted craft in the CMD, and radio subtitles & critical messages) are rendered in the largest size, and these don't break.) If the font caches are dynamically allocated (and I think they are, since they seem to be dx objects), it should be possible to render larger fonts to fonts.dat, and Jeremy's new rendering process would hopefully understand the larger sizes and adjust wrapping accordingly. It may also be necessary/desirable to patch the functions that decide which of the three font sizes to use based on HUD scale to reflect the new sizes, so that you still get two different sizes for different HUD elements at HUD scales beyond 1.5.