It is a nice feature to be able to personalize your phone using photos you have captured with your device, and using them as wallpaper for your device!
The wallpaper feature on your device has size limitations that would require you to crop the picture down to a certain size in order for it to be used as wallpaper. When in the cropping part of saving a picture, you can adjust the arrows out to the furthest points allotted to get as much of the picture displayed as possible. You may also try adjusting the picture resolution to see if that allows you to display more of the image.
I hope I have answered your questions, and have addressed your concerns.
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