It looks like you are using the Pixels option in your sample screen shots. This will create small fonts for larger pixel dimension images. I use the percentages option when I need to have approximately the same watermark size, no matter what size the resulting the pixel dimension might be. For your example I used a 5% inset and 10% for the height and width sliders. The watermark starts to look crunchy for small pixel dimension images ( 480 x640 ). For any image under 1000 pixels, I recommend increasing the height and width sliders to 25%. I have attached a screen shot of my Watermark settings dialog.
--Bob