How can I crop output to screen selection?

[dgm3333]

OBS allows me three settings for base canvas - the smallest I can select from the dropdown is 1280x720 - although I think it set it to 1650x900 after I selected resize output.
I want to record a patch of screen which is approx 500x350
I can crop the input with a filter, but the output seems to be locked to the base canvas size or the other weird size despite selecting the resize option and having the appropriate screen region selected.
What else do I need to do to get rid of the large black surround?

 

[koala]

Works for me exactly like I (and probably you) expect it to work. I crop some source, doesn't matter if I use the crop filter or do ALT-dragging the edges, then right-click the source->Resize Output (source size) and the source completely fills the left window (in studio mode). I don't have any black parts, it's all background gray. To make the right window adapt (in studio mode), click Transition. The new size can be verified in Settings->Video->Canvas size.

By the way, the canvas size is an input field. You can click into the field and type any resolution you want. The drop down list is just providing examples, and the Resize Output function is just a shortcut for reading the size of the selected source, pasting it into that field, and moving the source to the top left corner of the canvas.