Apologies for the extremely late reply! Hopefully you've found some answers to your questions elsewhere, but if not, perhaps this information will prove to be pretty useful.

There is no easy way to get around the 16-bit color requirement, although I simply switch back and forth when I want to play. As for changing your resolution, there is a way to change between full screen and windowed mode. With the latter, you can resize the window at will. I have the answer mixed in with many others here, but here are the instructions:

In a docked world (C3/DS), you should be able to toggle screen modes by clicking the “Windowed Screen” choice in the Options menu in-game. For undocked worlds, the keyboard shortcut Alt+Shift+Enter will toggle between full screen and windowed mode when in-game. A final option is to edit the user.cfg file using the following instructions. Make sure to back up the file ahead of time.

I. Locate the user.cfg file for either Creatures 3 or Docking Station. It should be located in the main Creatures Exodus\Creatures 3 or Creatures Exodus\Docking Station directory.
II. Open user.cfg in a word editor, such as Notepad.
III. Find the line labeled “FullScreen 0“.
IV. Change the value from 0 to 1 and save the file.
V. This can be changed to always open the game in fullscreen (0) or windowed mode (1).

Finally, integrating the two games is pretty simple! Start up Creatures Docking Station and create a new world (if it is your first time loading the game, you will automatically be taken to the screen to start a new world). There is a button between the green checkbox and red cancel button. It should say "Capillata only" underneath it. Click this button and it should change to "Capillata docked with the Shee Starship" which will combine C3 and DS.

Enjoy, and feel free to ask any other questions!