OW, that's gotta suck.
I just looked at the config & I've never seen a game without an 8x6 option before. Damn, just looked at the config & there's no entry for resolution. You could TRY running it in windowed mode: Under the [3D] header in SFC3.ini change the 0 to 1 in "windowed=0" That might override the native resolution & force it to a smaller one.
Sadly, I think you might have to shell out the cash for a new monitor. 15" monitors are quite cheap at the moment & can handle 1024x768 fine, hell, 17" monitors are pretty cheap at the moment.