I used to use one called Magnifixer before I got massive screens. But the window itself is in a fixed position, the content will show what's around your pointer though and it can be resized easily. It worked for my needs and was easy to set up / use, very simple options and some hot keys, can be set to launch with windows. Might not fit the bill entirely, but I'd say it's worth looking at at least.
I also had this problem.
Tried a lot of solutions and none worked.
On my laptop it goes full screen with black bars to maintain aspect ratio but on desktop it becomes stretched.
I found a workaround though using this software http://www.blacksunsoftware.com/screenmagnifier.html
Basically you can zoom in on the game window.
I literally typed magnify screen windows to get this on the first page. Seems to fit your requirements to the dot.