Ok -- I finally figured this out after a bit of experimmentation.
Make sure the Chrome browser has focus (click somewhere in the browser window), then press Ctrl+Shift+1 (that's the number one), or Ctrl+Shift+2. That will cause Chrome to zoom in and out in a weird way that doesn't show up on the Zoom control in the three-dots menu in the upper-right corner. It will still show 100% Zoom, even though you're zoomed in (or out).
I have no idea what purpose this serves. And it's tied to your Google account somehow, so it affects all your Chrome browsers on all your devices. It will zoom in and out of ANY web-page, not just YouTube, but it has weird effects on YouTube that mess up video playback as I described.
Anyway, if your YouTube player in your Chrome browser is zoomed-in in a weird way, or ANY web=page you frequent is not fitting right, try Ctrl+Shift+1 and Ctrl+Shift+2 to zoom in and out to make it fit properly again.