I don't think that Linux itself is the issue, because I think ANY OS with a small screen has this issue. I'm just not sure if you can rotate the screen with Linux, although that's not the way I prefer to work around this.
I would recommend, if possible, buying a desktop; they last longer, are more powerful, and you can buy a larger monitor if you need it. Actually, now that I think about desktop monitors, you might be able to plug your laptop into one and change the resolution or whatever.
I don't know the smallest screen that Stencyl can fit on, but I think that it's actually more expensive to buy really small screens anyways.