Cropping the tiny Regular 8mm frame would increase visible grain, but it is doable. A lot depends on the grain and image quality of the film stock you use. However, going Anamorphic Widescreen works great also. There were several 1.5x compression anamorphic lenses made in the 1950s to 1960s that are small and compact. The most expensive is the BOLEX Moeller 1.5x lens, which coupled with its dedicated lens holder mount is very nice. The lower cost alternatives were: Yaschica, Elmo, S.T.O.P. Hypergonar 1.75x(which now seems to be very expensive), KinoScope, VistaScope (made by Delrama in Holland)iand others. These were all small lenses originally intended to fit the Regular 8mm camera lens, some with lens adapters or using a small tripod socket mount.
Some other lower cost 1.5x compression lenses were the Palamorphot 1.5x and the MagnaScope 1.5x.
If you don't mind the 2x compression format (yielding a 2.66:1 aspect ratio) then rigging up anyone of the many affordable 2x anamorphic lenses out there would work. It might look a little odd with a large lens rig on such a tiny camera, but I've done it many times, and works great. Consider the affordable KOWA 16D or F, and the very affordable often under $100 LOMO lenses from Russia or Ukraine on eBay.
Then there's the new tiny I-PRO anamorphic 1.33x lenses being made for cellphones which should easily fit the tiny 8mm camera lenses from Moondog Labs and other similar type attachments (not the Wide Angle lenses you see sold!), B&H Photo's price is $175 and they also make a 52mm filter adapter for it. This lens will yield the 'modern' 16:9 aspect ratio format which all modern Televisions and digital video cameras are set for.