This isnt a big problem for me, but it does bug me every once in a while so i thought i would bring it up.
I usually have the text box open all the time because i play most of the time with others and i want to see what they say, and sometimes the text balloons get all jumbled up. I have the text box on the bottom of the screen just above my experience bar since its pretty much the only spot that doesn't cover something up. This is fine until I am in a battle and then it gets a little annoying since it covers up the stats of people on my team and sometimes i have to close it no be able to click on a teammate or see what spell they are casting. Sure this doesnt take more than a second to do, but i would prefer not to do it.
My suggestion is to make a small space near the bottom of the screen for the text box and your player stats. Exactly how it is right now, but pushed down a bit so that it is all off the playable screen. I know this will remove some of the play area, but most games I have played have all of your player stats and text box in a none movable area on the bottom so that it is not in the way of the playing area.
First of all I noticed you mentioned the Chat Bubbles being in the way and I wanted to make sure you knew that you can turn the Chat Bubbles off. Press Esc and you will see on the third page a Chat Balloons option. This will toggle them on and off.
Secondly, I want to make sure you know you can resize your chat window by clicking on the bottom right corner and dragging. You can't get it much smaller vertically than it is now, but you can make it narrow and tall. This works well if you're placing it above your health and mana or above your compass and spellbook.
Lastly, I thought you'd want to know that there is a keyboard shortcut for opening and closing your chat window. When you aren't typing in the window, press the letter O on your keyboard for a quick open/close toggle of the chat window.
I too realize it gets in the way sometimes, thank you for your feedback on this.