Typically, the Scheduler's editor is supposed to work with only one event at a time. Plus, it is modal on purpose — to prevent selection of multiple events or slots.
With the modal overlay disabled/removed we cannot guarantee the proper behavior of either the Scheduler or the editor. Thus, I would not suggest you removing the modality of the dialog.
As editing of events is quite a complex case, and multiple slots/events makes it even more complex, I suggest you to post a feature request on the case, so that the dev team have the chance of implement a built-in multiple events editing that would work as expected and you would not need to apply workarounds, hacks or interact with the built-in functionality of the widget.
Typically, the table holding the all day events has class k-scheduler-header-all-day. You can try redecoration the element and see if you can enable scrolling. However, this is not so easy as the representation of events does not include the DOM elements of the events in the same table, which makes dynamical height to be rendered. Thus, any size adjustments might lead to even worse behavior and unexpected side effects.