How to wrap the text in Modal input box?

You can use the "textarea" form item:

import {Modal} from '@daypilot/modal';

// ...

const form = [
  {
    type: 'textarea',
    id: 'textarea1',
    name: 'Multi-line text',
  },
];
const data = {};

Modal.form(form, data).then(modal => {
  console.log(modal.result);
});

How to edit the event with text area?

The event data need to be passed as "data" parameter.

Let's say you have the following event:

{
  start: "2022-06-01T00:00:00",
  end: "2022-06-05T00:00:00",
  text: "Long description",
  resource: 1,
  id: 1
}

In onEventClick (and other events), you get DayPilot.Event object which stores the original object under "data" property (see also https://api.daypilot.org/daypilot-event-data/).

You can open the modal dialog like this:

onEventClick: async args => {
  const data = args.e.data;
  const form = [
    {
      type: 'textarea',
      id: 'text',
      name: 'Event description',
    },
  ];
  const modal = await DayPilot.Modal.form(form, data);
  console.log("updated data object", modal.result);
}

The form[].id property specifies the source of the item data (in this case it will read the description from data.text).