Sway sort of does that. It does not resize live, but uses a transparent overlay to show where the window will be. You can do all of the moving and resizing with the mouse this way.

I do not know the answer, but this got me thinking: would it be easier to set up a single login for both session and decryption if /home was on a separate partition and only /home was encrypted?

That is incorrect. Both are pretty barebones from the start and have a big pool of extensions to get the functionality that you need. It might be more involved on the vim/nvim side, but that is more of an accessibility VS personalization thing.

There are even sort of distributions for nvim that bring you all the common functionalities already configured.