What you want to do is highlight the section you want, copy it, change the picture's size via Image>Attributes (in Paint) to something ridiculously small, then paste. The window will automatically adjust itself to barely fit whatever you've highlighted, so you don't get that annoying white space.
Then if you want to change the size of that highlighted portion, resize it using the handles but be sure to change the image's attributes to fit the new picture or else you'll get white space.
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