If it were a conservative filmmaker who had committed a fraud like this, the newspaper would have been suing for $100 million dollars.
You're absolutely right about that.
A suit for small damages works better in this instance in my opinion.
The newspaper carried the headline (albeit inside). Therefore, Moore's use of it on the front page for his film, would probably be condoned by the judiciary - if the paper was suing for major financial damages.
However, if the Judge sees that they are suing for small money, but on principle - the judge is more likely to swing in their favour, thus claiming the moral victory over Moore.