Hmm, interesting idea. I’m not really sure how it would work with this script though. I think it would require a fair bit of modification. You may be able to find something that does what you want better than this script though.
The problem is that the grid is an image comprised of other images which are the blocks that people upload. If you were to resize a block to be able to fit the word you would have to have different sized blocks for different sized words. Or you could just use an image to represent the word. Then the word could appear on the hover over. It sounds like a lot of work though. Chances are there are other applications out there similar to what you’re looking for. You might look into word walls, flow charts or mind maps. Maybe you are looking for some sort of project management application. Maybe even check out Trello.com.
If you can’t find anything that does exactly what you want I could create something for you. I charge $65 CAD/ hour for custom development. If it was something that might be useful to everyone I could potentially just work on it in my spare time as an open source project and you could use it whenever it was ready.