Not out of the box, but the template is rather easy to expand and adapt.
For your particular need, I would create a new function based on the "choice" one that creates the new smaller window as you said.
Well, I managed to merge my old Create_Choice function with your template! It works great so far! I even used the "Wait For Signal" command to smooth it all out.
Also for anyone interested,
I've found a way to display Dialogue without using the utility or loading anything from elsewhere (For games with less text).
In your event do the following:
Set the size of DialogueData array depending to the number of text boxes you are going to need.
e.g. 1 text box -> 1,3,1
e.g. 3 text boxes -> 3,3,1
DialogueData -> Set value at X0 = "Text you want to display"
Call "Dialogue_StartDialogue" function.
Of course, writing all your game's dialogues inside the C2 project may not be for everyone. But it might be better for a smaller game workflow-wise