Oh shi-- I am too caught up playing SIF that I completely forgot about this.
Now, let's try another option that does the same thing. First thing first, set your resolution to 1024x768. Now, right-click on desktop > Screen Resolution, and click advanced settings. This window then should pops up:
Change the scaling option to 'Maintain Aspect Ratio.'
I'm not sure if it is the same for windows 8 though, since I don't have windows 8 and I don't have any intention to update to it yet.
Btw, I've noticed that when my screen aspect ratio is 16:9, I have the same option as you (I only have 'Maintain Display Scaling' though). Are you really sure that you have changed your resolution to 1024x768? Since from your screenshot, your screen doesn't look like it is stretched in my opinion.