I just pushed the code that changes applyMagnification in the way you suggested, with appropriate changes throughout config, unit tests, and examples.  Plus there are a few updated comments clarifying that mu is the rescaling for area and flux, i.e., linear size changes by sqrt(mu).

However, I have NOT done anything with the correlatednoise.py routines that relate to changes in size (also pinging @barnabytprowe for this).  Currently there is an applyMagnification and createMagnified that works in terms of linear size, and there's no applyDilation/createDilated.  In the context of correlated noise, changes in size *don't* relate to lensing magnification of areas, so I didn't think the change to work in terms of mu here makes sense.  The two options I can imagine are (a) leaving it as-is, with a warning that the applyMagnification means a different thing here because of the different usage, or (b) changing the name of this routine?  What do you think?