Well, it looks like the black bars are gone now and I'm playing at full 1920x1200. Not sure if that's intentional, but it's causing a lot of other visual issues now, such as the game being visible behind the title screen / main menu at the top and bottom, the semi-transparent bars for cutscenes just hanging out there at the edges while playing, and during cutscenes they don't cover the top and bottom parts of the screen now.
As for the dialogue issues, the slime dialogue works now but I still get a freeze at the shrine, at least there's a handy popup window for errors now though.