I finally figured out how to play this in windwed mode and lower the resolution to play in a small screen. There's no XML file to adjust, you in fact need to edit the registry.

Win + R
regedit
HKEY_CURRENT_USER > SOFTWARE > Hello There > Kung Fury

Inside are three 'Screenmanager' registries

fullscreen = 0
height = 300
width = 400

Now run the game and its resolution is perfect. You can adjust the numbers to your preference.