Just a general scanning rule- scan everything as flat as possible at 600dpi with descreen turned on.
But yeah, it's impossible to turn a square into a rectangle without stretching it. The Namco Museums were sorta easy because the cover is mostly white, and I was already reworking the cover for myself because you can see through the white on the scans and they needed some cleaning.
But if you have a strategy guide for Little Mermaid II, that would help, since it will be closer to DVD dimensions. Or the Little Mermaid II DVD movie cover could probably be made into a custom game cover. (I haven't played the game nor seen any of the sequel movies to know if the plots/ characters match up.)