It might mess up some UI elements such as dialogue windows, but otherwise it's down to preference. By raising the resolution the viewport of the game becomes much larger, meaning that you can see a lot more as if the camera was zoomed out. The game was never meant to be viewed like this by the designers, and it might reveal empty areas and other flaws outside the regular area.
I say give it a try, and see if it fits you. There should be a config file after installing the patch where you can revert it if you prefer your games super-vanilla like me ;)
The modders actually went to great lenghts not to have any kind of problems like those. Particularly the issues with UI elements and "out of map" zones are excellently handled. They didn't just mess with the resolution, they put a lot of work into it.
The only real issue is the game being "zoomed out" as you explain it, but choosing a smaller resolution that still has the same res. ratio as your monitor (in case of an LCD one) is still an option.