You can set a custom resolution through MGE, or a few utilities available on PES, or even just by editing the registry values for Morrowind's ScreenWidth and ScreenHeight to fit your monitor precisely.
If you find that you'd like to adjust the field-of-view, as well, then you'll need MGE. I think that FPS Optimizer can do it too, on second thought, but I've never tried that.
Good luck!