I had this idea too, having all the tools on top is unpractical. A simple side bar that the user can choose to place on the left or right that can slide in and slide back out when the user no longer needs its functionality, would solve a few problems.
Even better if you could customise the content of the side bar.

I agree! It is very necessary until the gestures of the S-button are able to be used.

Yes!!! Please, please add this! I'm begging you lol!
Seriously, IMO this would make Papyrus a powerful tool for anyone taking math/physics/etc... classes (that's quite a few people ;-) not just for taking notes in class, but to do homework. I've been looking all over for an app that would ease MANIPULATING equations. Papyrus is by far the best I've found, because of 1st the selection tool, 2nd the duplicate tool and the infinite sheets (and right now S-note and notibility's hand-writing to equation make pretty pictures, but then all you can do is stare at them; you can't delete or copy a piece of them and put it elsewhere). However. That it takes 4 taps (gulp!) to switch from the selection tool to the pen tool is quite annoying even for me (and will stop anyone attempting to do this with simpler equations than mine; most students have simpler equations ;-) . Adding a movable, preferably customizable, quick bar as Jonas suggests would remove that bottleneck.
With a (movable, preferably customizable) quick bar to switch between tools in 1 tap of the thumb or index of the hand not holding the stylus, one would work twice as fast at least (1 tap as in: no need to tap the screen to activate the tool). At least the following tools should be available to add to it: pen, selection, duplicate, copy to clipboard, paste from clipboard (which right now tends to disappear into the roll down menu at the top right...).
Same with colors (I'm into color coding too!), having the option to add a few (say, 3-4-5) colors of one's choosing directly into a customizable quick bar would be great - although being able to switch between tools in one tap is even more crucial IMO.
Preferably the quick bar shouldn't be too big though (the one is S-note is too big for instance), not thick, adjustable in length with the number of tools people add, with definitely an option to make it horizontal or vertical.

I'd like a quick-bar that you can place and stick to where you want it to be. In the quick-bar I want to be able to choose my most used settings/colors/tools for easy access while writing. There should be an convenient hide/show button in case it gets in the way or an opinion to not use at all as well.
I've noticed that while I'm taking notes for my classes, all of them in fact, that's how good your app is - I need a quick-bar for colors. In math I want to use many colors for different things to see and understand my notes better. It's quite frankly annoying to move all the way to the top to change my colors. I want an easy access bar at the left side because I'm right- handed to change colors quick with my left hand thumb. It would be quick and I can keep up with the professor! :)