So with that being said. I should probably not use the hack and use the original resolution for the best image (non squished) on my 4:3 CRT correct?Widescreen on these older systems works by squishing everything horizontally, with the idea being that your widescreen TV will stretch it out. Look up anamorphic wide screen for a decent explanation of the idea.
If you play on a 4:3 CRT you should still see more, but everything is going to be squished.