No you wouldn’t use cropping, because you want to go from 4:3 to 16:9, so you need to scale your image up (and lose image quality), if you had a 16:9 letterbox image, then you could use cropping to get rid of the letterbox.
So the way I described in the first instance would be the way to go, you don’t need to send it back to FCP from compressor, yes the image will be squished, but there’s not an awful lot you can do about that.
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