With EE you can zoom in.
If you don't have EE choose a lower resolution in the widescreen mod or simply play without it (800x600 with black borders can be survived).
It's very bizarre. I have the wide screen mod. Fills up the whole screen but for some reason it's killing my eyes. I really don't know how to explain it. When I watch someone on youtube play it, it looks fine to me, but when I go to play it, it kills my eyes. If I play it without the wide screen mod, it looks fine, but i just wish i could make it bigger on my screen. The wide screen mod technically does that, but it's as if it makes it fill the screen without making anything larger if that makes any sense. Idk, maybe I'm crazy.
The original BG games are fixed asset (640x480) games, so any resolution you play in above that the game is effectively zoomed out. So, if you choose a resolution that fits your desktop when you use the widescreen mod, the game is zoomed out far too much for the fixed assets, making everything look tiny. The widescreen mod works by doing just this: zooming everything out. The best thing you can do for your eyes is to completely remove the widescreen mod and instead run BGConfig (from inside the installation folder) and enable unsupported modes. These include a reasonable 1024x768, about the very highest you ever want to go. You must also set your graphics driver (control panel) to perform scaling on GPU, otherwise the image will be stretched if you have a widescreen monitor. This results in black borders at either side, but there's no getting around that because, as I said, the games' assets are fixed (they don't scale).