Moving this conversation to the user list for wider discussion.
GeoServer uses log4j, you can configure additional log profiles (adding a file to the logs directory) if you wish to experiment with alternate logging levels and formatting.
There are lots of examples of how to configure log4j stack traces to one line
It looks like the approach is to define a converter that substitutes \n
Perhaps these can be added to make the message one line also,
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Jody Garnett