I'm posting this, because I had some problems with GK. While I was able to find the solutions here, it took me a while, so I decided to post a digest of sorts.

Issue 1: some items had higher resolution than backgrounds.
Solution: In resource.cfg I've changed videoDrv setting from VESA.DRV to VGA.DRV.

The rest of the fixes went into dosboxGK.conf.

Issue 2: Main menu song stuttering.
Solution: In [cpu] I've set cycles to 10000.

Issue 3: clicks in music.
Solution:
[mixer]
rate=44100
blocksize=1024
prebuffer=50

Issue 4: The picture was stretched on the screen.
Solution: In [sdl] I've set fullresolution to my desktop's resolution and set output to ddraw. Most other options didn't scale the image correctly for some reason. opengl did, but it left an annoying white frame around the image.

You can also simply use ScummVM to play the game with both VGA (by choosing DOS version) or VESA (by choosing Windows version) graphics. Personally, I thing VGA with added 2xSAI filtering looks a lot better as VESA simply scales (and horribly pixelates) the background just to give high resolution inventory icons.

By using ScummVM you don't need to go through all the trouble of setting up DOSBox correctly and you're able to play the game as it was intended.