How to do fast bitmap stretching?

If you want to really improve your image display, then consider using hardware accelerated functions. Use DirectX or OpenGL libraries.

Once, I used DirectX and sprites to display a 2D image (and a few more things). I will copy the code that worked for me, but please note I am not a Direct3D expert and I used DirectX9 so you can probably find better and more up to date code.

Initialization code:

//creates the Direct3D object (type: IDirect3D9*)
m_pDirect3D9 = Direct3DCreate9(D3D_SDK_VERSION);
if (!m_pDirect3D9)
     return FALSE;

//setup the display mode (change whatever you want depending on your requirements)
D3DDISPLAYMODE displayMode;
m_pDirect3D9->GetAdapterDisplayMode(D3DADAPTER_DEFAULT, &displayMode);
displayMode.Format = D3DFMT_A8R8G8B8;

D3DPRESENT_PARAMETERS presentParameters;
ZeroMemory(&presentParameters, sizeof(D3DPRESENT_PARAMETERS));
presentParameters.MultiSampleType           = D3DMULTISAMPLE_NONE;
//don't forget this
presentParameters.Windowed                  = TRUE;
presentParameters.SwapEffect                = D3DSWAPEFFECT_DISCARD;
presentParameters.EnableAutoDepthStencil    = TRUE;
presentParameters.AutoDepthStencilFormat    = D3DFMT_D24X8;
presentParameters.BackBufferCount           = 1;
//format = 32 bits per pixel (ARGB)
presentParameters.BackBufferFormat          = D3DFMT_A8R8G8B8;
presentParameters.Flags                     = D3DPRESENTFLAG_DISCARD_DEPTHSTENCIL;
//put the size of your image here
presentParameters.BackBufferWidth           = imageWidth;
presentParameters.BackBufferHeight          = imageHeight;

//create the device (type: IDirect3DDevice9*)
HRESULT res = m_pDirect3D9->CreateDevice(
    D3DADAPTER_DEFAULT,
    // use video card
    D3DDEVTYPE_HAL,
    // window handle (the one into which you will display the image)
    hWnd,
    //this was important in my case
    //especially the second one: floating point operations may give
    //different results in another thread if you don't use FPU_PRESERVE!!
    //but in most case I think you can remove this
    D3DCREATE_SOFTWARE_VERTEXPROCESSING | D3DCREATE_FPU_PRESERVE,
    &presentParameters,
    &m_pDirect3DDevice9
);
if (m_pDirect3DDevice9 == NULL)
    return FALSE;

//create the sprite used to display the image (m_pSprite is of type ID3DXSprite*)
D3DXCreateSprite(m_pDirect3DDevice9, &m_pSprite);
if (m_pSprite == NULL)
    return FALSE;

//create the texture that will be used by the sprite
//m_pTexture is of type IDirect3DTexture9*
m_pDirect3DDevice9->CreateTexture(
    imageWidth, imageHeight,
    1,
    0,
    //pixel format: in my case I wanted to display a 8 bits/pixel image
    D3DFMT_L8,       
    D3DPOOL_MANAGED,
    &m_pTexture,
    NULL
);
if (!m_pTexture)
    return FALSE;

Updating the texture:

//in my case, the image is 8 bits/pixel
void YourClass::UpdateTexture(const BYTE* image)
{
    if (m_pTexture == NULL)
        return;

    D3DLOCKED_RECT lockedRect;
    m_pTexture->LockRect(
        0,
        &lockedRect,
        NULL,
        D3DLOCK_DISCARD
    );
    for (int y = 0; y < m_imageHeight; y++)
    {
        CopyMemory(
            (BYTE*)lockedRect.pBits + y * lockedRect.Pitch,
            image + y * m_imageWidth,
            m_imageWidth
        );
    }
    m_pTexture->UnlockRect(0);
}

Drawing code (to be called from OnPaint):

void YourClass::Draw()
{
    if (!m_pDirect3DDevice9)
        return;

    m_pDirect3DDevice9->BeginScene();
    m_pDirect3DDevice9->Clear(0, NULL, D3DCLEAR_TARGET, D3DCOLOR_ARGB(255, 0, 0, 0), 1.0f, 0);

    // draw the texture
    m_pSprite->Begin(0);
    m_pSprite->Draw(
        m_pTexture,  // texture
        NULL, NULL, NULL,
        D3DCOLOR_ARGB(255, 255, 255, 255)   // use alpha + colors
    );
    m_pSprite->End();

    m_pDirect3DDevice9->EndScene();
    m_pDirect3DDevice9->Present(NULL, NULL, NULL, NULL);
}

You can do something similar in OpenGL. Unfortunately, I can't provide code in native OpenGL.