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Exactly what I also often say:

"The emulator needs a host display greater than 800 pixels high to fit the Alto's 606*808 display. Just to show how far we have not come, many "modern" displays can not quite handle that."

Luckily Apple started with the retina displays. Otherwise we were stuck with low-res displays because "the consumers don't need more."

Uhhh, Apple? I'm typing this on a ThinkPad T42p from 2007. It has a 1600x1200 display. They are also available with 2048x1536 (QXGA) displays. These machines were rather pricey when they were launched, but so are those made by Apple.
Until recently I've used a Sony from 2001 with the same resolution as your ThinkPad. Still it's not relevant, the quote you reply was, again: "many "modern" displays can not quite handle that." It's about 808 pixels vertically.

In my country, today searching different available notebooks on only one site, I get more than 300 different models with the vertical resolution of 768 pixels which is less than 808.

That line bothered me, since the total number of pixels is only slightly over half the pixels of a 2005-era 1024*768 display. The only difference is that the Alto used a portrait-oriented display, which never caught on.
Alto was designed in 1973. Your 2005 is already 32 years later. And the quote is explicitly not concerned with the total number of pixels but with the vertical number of pixels.
I never interacted with high DPI displays, but from my bedroom it seems like having a faster bigger keyboard .. maybe usefull but not the real bottleneck (except for fringe cases : high end CGI, movies, biology). Some times too much is a regression.
Also pertinent: an emulator of Alto Smalltalk-72 by Dan Ingalls, the original implementor.

http://lively-web.org/users/Dan/ALTO-Smalltalk-72.html

It says that it is emulating the Nova instruction set - the Alto hardware manual at http://bitsavers.informatik.uni-stuttgart.de/pdf/xerox/alto/.... says that the standard microcode on the Alto emulated the Nova.

This is awesome, but ... it's from 2008! A shame it hasn't been evolved since and No additional software was located? I wonder if http://xeroxalto.computerhistory.org/index.html has some of the missing bits.
Not to be the negative nancy, but the inline thumbnails are awfully pixelated =( Why not just reference the full-size images and set their width/height to 25% or whatever?