I do not believe the 14" monitor will support 800x600, even with a memory upgrade. I think you are stuck with 640x480.
The display size on that monitor is hardware controlled (can not be adjusted by control panels). If you have a 14" Plus Display, there are no screen size adjustment controls. There may be something inside the display housing (near the tube or flyback transformer), but I have never taken one apart to know for sure.
That monitor is pretty old and the shrinking image may be a case of a failing analog board (supplies control voltage to CRT,etc.).