Is there a way to enable minicom linewrap by default

Your guess should be correct, because this is exactly the line, minicom writes itself when invoked in setup mode via minicom -s:

# Machine-generated file - use "minicom -s" to change parameters.
pu linewrap         Yes

However it neither does not work on my machine. A workaround is to use the environment variable MINICOM

MINICOM="-w"
export MINICOM

as explained in the manual:

When minicom starts, it first searches the MINICOM environment variable for command-line arguments (...)