As far as I know, an auto resizing text box is not possible.
Pages uses a combination of a word processor and a page layout paradigm for its documents. In word processor "mode", you can type text on a page, and text that does not fit the page will flow to a new page.
Text boxes are part of the page layout "mode". In this mode, a page is a combination of objects (pictures, text boxes, et cetera) that will always stay in the place you put them, and at the size that you defined them.
If you type to much text in a text box, the box will not grow automatically. You must resize the box by hand. Another option is to connect the text box to another textbox on the same or on a different page. When 2 text boxes are connected, the excessive text in the first box will flow to the second box.
I hope this helps.
