So you have a 1280x1024 monitor. That's a 5:4 ratio. The Twitch player has a 16:9 ratio, so by default, if you set OBS to match your monitor's resolution, Twitch will play a 5:4 video in it's 16:9 player, which will leave the empty areas of the player black ("black bars"). It looks like you decided to "fix" that "problem" with the monitor capture by stretching the image so that it filled the screen, even though that caused the picture to be come quite distorted and squished.
The "problem" with the Window capture is similar. First, you can select the source and press CTRL+F to make it fit in the scene, and then press Edit Scene and hold Shift and drag the edges to skew and distort the image to shoehorn it into a 16:9 resolution.
But honestly I don't think it's worth distorting the picture to get rid of the "black bars". If you want to stream at a 16:9 resolution, get a 16:9 monitor, or play the game in a window at a 16:9 resolution. Stretching the picture looks ugly.