I don't use netscape under linux. But maybe try installing it to netscape's settings folder in your user directory? It's probably under something like "~/.netscape" (maybe "~/.navigator")?
If not, is there anywhere to configure the menu font size in the GUI?
Also, some linux desktops let you configure the size of the menu items across all programs - maybe this is interfering with your changes? Would you like to do it for all programs instead?
I believe XFCE is one such desktop that has an obvious menu bar setting, but I'm not in it right now so I could be remembering wrong.