There is not a way to encrypt the key in the Tools | Product Authorization window or in the file where the key is stored.
If you would like to submit an enhancement request for this, you can do so at our Idea Pond.
http://www.toadworld.com/products/sql-navigator/i
This site is solely dedicated to tracking customer enhancement requests and allowing the user community to vote on the most useful feature. The development team personally monitors this website and provides customer feedback on their enhancement requests. Please let me know if you have any further questions in regards to this enhancement request process.
You may want to do a search to see if there is already an entry there for this, so the same enhancement request is not submitted twice.