Well, the thought is that it's a fairly simplistic top-down game. The screen will be divided into two fields, a top one for the actual "game screen" (in lack of a better word, while the bottom part contains all of the interface stuff such as a dialog box and inventory. For this we figured that we'd just make two JPanels, one for the top and one for the bottom and divide the smaller one into three sub-panels. This is all just in the planning stage right now as we didn't want to have to go back and re-do everything once we found a way to do it so I don't have any actual images to show.
The game screen itself is planned to simply consist of a background image of the current room the player is located in (with floor, walls and some non-movable furniture) while anything else (the player, npcs, interactable objects) will be drawn onto this image later. I figure this is probably the standard approach to these kinds of things. I'm quite interested in the first suggestion you made (I assume that's also how you get the "black edges"), but isn't there a risk that the actual game screen will be very tiny on certain monitors in that case?