I looked into that thinking that was the cause but the only place I thought to change it in the source was under the 
INIT.SH file under 
/Device/generic/x86? Unless you can correct me in that I'm not changing the Resolution correctly? (Running on QEMU) cause unfortunately changing that didn't fix the Keyboard problem. 
1.) Went to /androidx86sourcekitkat/device/generic/x86/init.sh
and changed to the following (changed to 600x400):
function set_drm_mode()
{
	case "$PRODUCT" in
		ET1602*)
			drm_mode=600x400
			;;
		*)
			;;
	esac
	[ -n "$drm_mode" ] && set_property debug.drm.mode.force $drm_mode
}
function init_uvesafb()
{
	case "$PRODUCT" in
		*Q550)
			UVESA_MODE=${UVESA_MODE:-600x400}
			;;
		ET2002*)
			UVESA_MODE=${UVESA_MODE:-600x400}
			;;
		T91*)
			UVESA_MODE=${UVESA_MODE:-600x400}
			;;
		VirtualBox*|Bochs*)
			UVESA_MODE=${UVESA_MODE:-600x400}
			;;
		*)
			;;
	esac
	modprobe uvesafb mode_option=${UVESA_MODE:-600x400}-16 ${UVESA_OPTION:-mtrr=3 scroll=redraw}
}
2.) I also tried installing the Google Keyboard and a few others and they all share the similar issue of not taking up the whole space and when I tap on say "J" it clicks "H" (to the left of it as if it is off coordinate)