Hi,
I take it that when you say "clip" you mean "crop".
You can crop a pic in the timeline by selecting it, clicking on the crop button as you have done, and then clicking on the Crop to Fill option and adjusting the rectangle that appears on the preview screen to crop the pic. The 16:9 aspect ratio will be preserved.
Another way is to simply crop the pic by taking a screen shot of it in the parameter that you want. So, do a simultaneous Command/Shift/4 on your keyboard. Your cursor will morph into a small cross hairs. While pressing your track pad, move your morphed cursor over the pic in the preview screen to outline the crop that you want. Then release your track pad. A screen shot will appear on your desktop that you can drag into your project. Of course, because of the 16:9 aspect ratio of the iMovie screen, you will get black bars around the pic so that the screen is filled out. No way to avoid that.
-- Rich