how do you alter the screen size on ipad mini

Zoom

While many iPad applications let you zoom in and out specific elements such as images in Mail or web page columns in Safari, Zoom lets you magnify the entire screen of any application you’re using to help you see what’s on the display. Zoom can be enabled on iPad using iTunes when you’re setting up iPad for yourself or someone else, or later, using the Accessibility menu in the Settings application.

Zoom works everywhere — including the Home, Lock, and Spotlight screens — even in applications that you purchase from the App Store.

With iOS 6, Zoom also works seamlessly with VoiceOver.

Here’s how it works. Double-tap with three fingers to instantly zoom in and out 200 percent. Or double-tap and drag three fingers to dynamically adjust the screen’s magnification between 100 percent and 500 percent. Even when zoomed in, you can continue using all the iPad gestures you’re familiar with — flick, pinch, tap — to run your favorite applications.

http://www.apple.com/accessibility/ipad/vision.html

I do not want to change the actual screen size. I want to change the image on the screen to fit on the screen. I don't want icons that are 1.5 inches wide so that only 4 fit on the screen.

You can't. The screen size is fixed at 7.9 inches.