Alternate Price Lists allow up to 6 decimals for unit price. No fooling necessary, and the Extended Price will naturally still be 2 decimals (or whatever the currency allows). You have to select this Price List for that item in order to allow the $0.128 per foot.

The quantity decimals is limited to 2 decimals. You are correct that you cannot order 0.005 units.

The stocking and pricing units don't have to be the same. You can stock in 1000's and sell in 100's. This of course may not be preferable, but it is doable. You can't sell in 1's because the Unit of Measure conversion would have to be 0.001 and currently there is a minimum cap of 0.01.