First split out the section of the video you want to resize. Do this by using the S key when the marker is at the points you would like to split in the timeline. Once the clip is split, click the icon that looks like a square with two pointy edges located near the right edge of the clip you wish to resize. Once in the crop dialog box, use the handles to resize the rectangle with the F in the middle so that it outlines the area you want to crop. Then you are done. Close this box, and you will see that your clip is now cropped and is resized to fit perfectly within the area of your project. Be careful with cropping, because the more you enlarge your footage the more visible pixilation becomes.

Peace