1) do not use Panorama in the VM. There is absolutely no gain in doing so. GENGRADD will either work or not.
I agree. Using SNAP, or Panorama, in a VM is unnecessary overhead, and does absolutely NOTHING for you.
I think it is a good idea to use the GENGRADD from the OS/2 additions.
Absolutely. It redirects video to the host video driver, probably meaning that Panorama, or SNAP, never even get used if they are installed in the guest.
2) have you increased the aperture size of the VM to 32 MB ?
I usually use 24 MB, but I have no reason to even consider using large screens. I always make the VBox window smaller than the host screen, but that is just my own preference (saves having to scroll it). The rules for the amount of video memory are the same for VBox, as they are for real machines. There is a limit, depending on how much video memory you have, and there is a limit to how much gengradd can handle (might even be 15 MB). You get the smaller of the two. The offered resolutions depend on what the BIOS offers, and VBox has ways to add custom entries to that list. If those custom entries stay within the capabilities of gengradd, and the video memory, it should work (but I must admit that I never bothered trying).
I recommend not going beyond 2048 for VIRTUALADDRESSLIMIT but you can experiment what works for you.
Personally, I find that VIRTUALADDRESSLIMIT, set to 2560, works best in all of my systems (even my antique IBM ThinkPad A22e, and virtual machines). Some systems will work with 3072, but most of them will produce many LIBCX log files, if I use 3072. All of them are running some version of ArcaOS, which has a patched kernel, to (partly) prevent problems with using upper shared memory space. Older versions of OS/2 probably should not go above (or below) 2048.