This is correct. Widescreen images are anamorphic (they use a non-square pixel). In fact, even 4:3 TV images are slightly anamorphic too. 720×480 is an NTSC DV size.
It all seems a bit weird, but it is normal. When you play it on a TV it will look fine. If you are using Quicktime, you can use the movie properties dialog box to adjust the display size to account for the non-square pixels on a square pixelled (computer) screen.
In Quicktime (I think you need Pro) go to Window -> Show movie properties. When the dialog box comes up, click on the video track, click the visual settings button and then adjust the display size to 720 x 405. Then save your movie. It doesn’t do anything to it, other than change the way that it is displayed to be 16:9.
Hope that helps,
Ben.
Fink
https://www.fink-base.com