Assuming you've updated to the latest GroovyMAME as well - the stretching options have changed slightly, and I can't remember where to find the guide for them.
Setting the resolution to 2560x0 looks better. It tells GroovyMAME to call switchres and use super resolutions when stretching. Setting the stretch options can tell it not to scale vertically (or only scale to an integer ratio, and never to stretch.) For CRT this is generally best. For example, using a 320x240 mode for a CPS1 game like Fight Fight, which renders natively at 384x224, means that
even before the image hits your CRT GroovyMAME is trying to fit 384 pixels into only 320, so you lose quality. Using the much larger horizontal resolution of 2560 means you lose nothing and things get scaled more evenly. (Every 3rd original pixel is 6 pixels wide, the other two being 7. This is much less noticeable, and looks very even.)
The vertical rendering, in this example, merely centres the 224 lines on the screen and stops there. That is, assuming the stretch options are set right. Which is precisely what you want, as vertical stretching does horrible things.
You can check things are working by leaving the nagscreens option on, and seeing what resolution swtichres has picked when you start a game