we have our own custom translation file ...

so you are forceing translation on a program that is pretranslateing the output...

The problem is not the 120 DPIs (I've been running this fine on 129 DPIs after all) but the fact that you changed the Windows GUI settings to display large or even extra large fonts

I use "Normal" size fonts and have not touch anything apart from increased the DPI:

My OS is English version of XP and I leave the defaul language to United States English but only change the "Language for non-Unicode programs" to translate.  As stated below, unless your program is not using unicode it will trigger the code page conversion?

I use a 15" notebook but set to maximum resolution of WUXGA so have to increase the DPI for easy reading:

Unfortunately, Windows does not properly support changing the font DPI settings in the GUI options.
It will lead to distorted (ie not properly resized) icons in the taskmanager, taskbar and desktop, among others, namely not properly scaling GUI windows to fit the larger fonts in.

The questionmarsk should actually be bullet points, maybe your locale doesn't support them?
("?" are a replacement for any codepage letters than cannot be displayed, it's lacking Unicode support of Autoit, maybe?)

Anyway, as the windows uses a fixed size, using larger fonts will naturally result in text being cut off.

May I ask what kind of display you use (inch-wise)?
Ususally, 120 DPI on an ordinary high-res display should still be easy on the eyes in terms of readability.

What do you know about that. You are correct!

also some "?" in the text.

OS=Windows XPSP3
Regional and Languages -> Languages -> Supplemental language support -> Install files for East Asia Languages
Regional and Languages -> Advanced -> Language for non-Unicode programs = Chinese