Aha!
"Fullscreen=original" seems to have fixed the problem.
...at least in full screen mode.
DOS prompt:
http://www.eftel.com/~almeath/temp/dosbox/dos3.jpg
In the game:
http://www.eftel.com/~almeath/temp/dosbox/dos4.jpg
I still get the "shrinking" window effect when playing a game in windowed mode, but I am happy enough to have things working properly in full screen mode, as that is the mode I will almost always be using to play games.
The only remaining issue then is whether you want to consider support for some extra resolutions in the next version of Dapplegrey, such as 1650x1080. However I still get graphic distortions when setting this resolution manually in the preference file. To be honest the difference is so small for taking up that extra bit of screen space that it is not really a big deal.
Thank you very much to all those who contributed to this thread and helped me get to the bottom of this.
😀