All free groups of finite or infinite countable rank are subgroups of the free nonabelian group $F_2$, which is linear. However, a free group of infinite uncountable rank will not be a subgroup of $F_2$. Is it linear, too ? This might easily follow from model theory, but I could not find a proof in the literature so far.

Free group of rank $c$ embeds in $Sl(2, F(t))$ where $F$ is a field of cardinality $c$. Edit: Here is the detailed argument which, as Yves noted in his comment, proves a stronger result. Theorem. Let $L$ be a field which is not an algebraic extension of a finite field and let $c$ be the cardinality of $L$. Then the free group of rank $c$ embeds in $SL(2, L)$. Proof. Let $P$ be the prime field of $L$; then $L$ has the form $$ P\subset E \subset L $$ where $E$ is a purely transcendenetal extension of $P$ and $L$ is an algebraic extension of $E$. Under our assumptions, $E$ and $L$ have the same cardinality, thus, it suffices to consider the case when $L=E$. Then $L$ is isomorphic to the functional field $L=F(t)$, where $F$ is a subfield of $L$. I will consider the case when $F$ is infinite since otherwise $L$ is countable and everything is clear (as the question reduces to the case of free groups of finite rank). Thus, $F$ has the same cardinality $c$ as $L$. Let $T$ be the BruhatTits building associated with $G=SL(2, L)$: This building is a simplicial tree with the pathmetric $d$, where every edge has unit length. The group $G$ acts on $T$ by simplicial automorphisms with the kernel $\pm 1$. Detailed description and properties of $T$ and the action of $G$ are in Serre's book "Trees." Let $v\in T$ be the vertex stabilized by $K=SL(2, O)$, where $O=F[t]$ is the ring of polynomial functions in $t$. Then the link $L_v$ of $v$ in $T$ is naturally identified with the projective line over $F$ (so that $K$ acts on $L_v$ by linearfractional transformations). In particular, the group $K$ acts transitively on pairs of distinct points in $L_v$. Let $g\in G\setminus K$ be a diagonal matrix with the axis $\gamma\subset T$. Then $\gamma$ contains $v$ and $g$ acts on $\gamma$ as a translation by some even integer distance $\ge 2$. In view of transitivity of the action of $K$ on pairs noted above, there exists a subset $K_o\subset K$ of cardinality $c$ so that the elements $g_k=kgk^{1}$, $k\in K_o$ have axes $k(\gamma)$ with the property that the 2point sets $$ k(\gamma) \cap L_v, k\in K_o, $$ are pairwise disjoint. (Call this property D.) Now, I claim that the elements $g_k, k\in K_o$, are free generators of a free subgroup of $G$. The proof is rather standard. For each $k\in K_o$ let $D_k\subset T$ denote the Dirichlet fundamental domain for the cyclic group $\langle g_k \rangle$: $$ D_k=\{ x\in T: d(x, g_k^m(v))> d(x, v), \forall m\in {\mathbb Z} \setminus 0\}. $$ Since each $g_v$ translates $v$ at least by $2$, and in view of Property D above, the domains $D_k$ have pairwise disjoint complements. Thus, Tits' pingpong argument (from his proof of the Tits alternative) applies in this setting and the subgroup of $G$ generated by the elements $g_k$ is indeed free with free generators $g_k$. qed. Note that one has to exclude fields $L$ with are algebraic extensions of finite fields, since in this case the group $GL(n, L)$ is torsion (for every finite $n$) and, hence, cannot contain a free subgroup. 


Yes, it's a simple application of ultraproducts. Suppose that for fixed $d$, every finitely generated subgroup $H$ of a group $G$ has a faithful representation $j_H$ in $G_H=\text{GL}_d(K_H)$ for some field $K_H$. Then $G$ has a faithful representation into $\text{GL}(K)$, where $K$ is an ultraproduct of the $K_H$. Argue as follows: consider the lattice $I$ of all finitely generated subgroup. Consider an ultrafilter $\omega$ on $I$ containing, for every f.g. subgroup $H$, the set of subgroups containing $H$. Then map $G$ into the ultraproduct $\ast^\omega(G_H)$ as follows: first extend $j_H$ to $G$ by defining $j_H(g)$ to be equal to 1 if $g\notin H$ (note that $j_H$ is a homomorphism only in restriction to $H$). Map $G$ into the product $\prod_H G_H$ by mapping $g$ to $(j_H(g))_H$. This is certainly not a homomorphism, but the composite map into the ultraproduct $\ast^\omega(G_H)$ is an injective homomorphism. Now the ultraproduct $\ast^\omega(G_H)$ is canonically isomorphic to the group $\text{GL}_d(\ast^\omega K_H)$. Finally this applies to free groups, but to many other groups, e.g. locally free groups and subgroups of ultraproducts of free groups, aka locally fully residually free groups. Note that if your group $G$ has a certain infinite cardinality, you can end up with a field of the same cardinality by restricting to the field generated by matrix entries of the image of your representation. 

