How can I change the aspect ratio of the sequence preview pane?
The program panel's sequence preview is mainly determined by the sequence settings. You can change those via Sequence → Sequence Settings. However, some parameters of a sequence can not be altered after creation, including resolution and aspect ratio (an exception is the automated adjustment of the sequence settings that is offered to you when you drop a clip in an empty sequence that doesn't match the sequence's settings). 

To fix your issue, create a new sequence with correct settings. Then go back to your old sequence, select everything (CTRL + A), copy it (CTRL + C) and paste it into the new sequence (CTRL + V). To create a sequence with correct settings automatically, right-click on of your source clips and select New Sequence From Clip (I recommend this if you don't know what some or most of the options in the sequence creation menu mean).

The size of the program monitor's preview can be adjusted with the Select Zoom Level dropdown button in the lower left of the panel. The other dropbown button that you mentioned (the one in the lower right) controls the Playback Resolution.