It seems Google are changing how you use the Google Drive File Chooser which always looks a bit goofy if you are using it in a spreadsheet because of poor design.
I had a go to see if I can resize the dialog at all and I don't think so. Here's my version of their code which demonstrates how you can wire it to insert a link to a Google Drive file.
There's an example file here: Drive Dialog example. Simply go to the File > Make a copy menu to see the code using Tools > Script Editor menu.