Yes...When you are doing data entry the field will expand to allow even paragraphs of text to be entered. No...When you are printing a report layout...the field will not expand to show more than the allotted space. You can make the field area as large as possible for a printout and FileMaker will remove unused/unprinted space and slide other elements up to take the space.
The space allotted to a field is what appears on the form. When you have more text it is displayed when you enter the field but is hidden when you exit. The actual limit to field characters for text is about 2 Gig depending on available RAM and disk space. If you normally enter large amount of text into a field consider using a container field. Hope this helps.