The needle size on the label us mostly to classify the yarn into a weight range. Patterns sometimes use a different one depending on the item. For something like a bulky scarf you can go up a couple of sizes. So that's a pretty small needle unless you knit loose, a 10 or 11 would be better.
One thing you need to know about stockinette stitch is that it curls under and doesn't lie flat. If that's okay with you then great. If you don't like it then you need to knit an edging on it - 4 rows of garter st where you knit every row, and about 3 sts in garter at the beg and end of the rows. On the knit row, just knit all stitches, but on the other rows, k3, purl to the last 3 sts and knit them. That'll help your edge be flatter.