Your macro is doing 4 SetPoint calls for the editbox. Maybe something like:
Lua Code:
ChatFrame1EditBox:SetMultiLine(true)
ChatFrame1EditBox:ClearAllPoints()
ChatFrame1EditBox:SetPoint("BOTTOMLEFT", UIParent)
ChatFrame1EditBox:SetPoint("BOTTOMRIGHT", UIParent, "BOTTOMLEFT", 250, 0)
The box should resize as you type more lines. It's been a while since I played with this.
You should be able to place this in your main.lua file.