I have a monitor that displays at a 1280x1024 resolution. Is there any way I can get the game to display the game in widescreen at 1280x720 or something? With the black bars at the top and bottom of the screen so the image doesn't stretch.

I tried rightclicking on the desktop to change the resolution to 1280x720 but the image stretches. No black bars show up in game or out of the game. I tried looking for a checkbox that people recommend to click and no such checkbox exists on that menu. I looked around the menus for my graphics card driver. No such luck there either. It seems everyone gets this option but me. And the people who made my monitor and graphics card, in their infinite wisdom, decided I didn't need the ability to put the screen in a letterbox. Are there any mods for this game, through MGE maybe? Or outside programs to force it for me? Something I can edit in the games .ini file? Anything?

MGE is your answer. It lets you play in widescreen.

It doesn't letterbox for you though (at least, I doubt it). Playing widescreen on a non-widescreen monitor doesn't have much advantage IMHO.

It has an advantage to me when the entire bottom of my screen has clusters of dead and broken pixels covering my screen. I'd get a new monitor but my graphics card probably wouldn't handle the latest resolutions. It's a real pain to find one in the 1280x720 range.

Nowadays, each 16:9 monitor should support 1280x720 resolution. I have 1920x1080 monitor, but i play Morrowind in 1280x720 and even some older games in 1024x768.