I noticed that YouTube actually scales the playback window to a larger size than your source file.
For some reason, the YouTube tag defaults to 425x350, which forces the video to scale up. If you click the tag and then change the numbers in it to
[yƶutube=320,260]
(add 20 to the height for the YouTube controller), then it should play back at 1:1, or at least closer to it.
[youtube=320,260]MLqGlvujY08[/youtube]
A couple of things make me suspicious, though. It's letterboxed, but probably ought to be full frame. If it was exported at 720x480, those are non-square pixels, whereas 320x240 is a square pixel size. Try exporting at 640x480 (a square pixel size), or when you're encoding, see if there's an option to the effect of "don't keep pixel aspect ratio," or "scale to fit."
Also, this particular file appears to be about 6.5mb as opposed to 65mb. If you did indeed upload a 65mb file, then it may have been re-encoded, or I'm just looking at the wrong thing. But 65mb is pretty big for something like this, especially since there's no camera movement, no cuts, and the only things that are moving are pretty small in frame. If it's 6.5mb, then you can definitely up the bitrate (try 2x what you originally used) when you encode.
Hope that helps.