Probably need some more info to answer your question.
By "stretch," do you mean enlarge or shrink? It will be blurry if you are enlarging -- that is never recommended, just like you cannot make a non-blurry wall-sized print from 35mm film. There is only so much "information" in an image.
Are you adjusting the image scale proportionately?
When you say "fit into an area," are you inserting the image into another program, like a desktop publishing file for printing? Or are you using the image for display on the web?
I can't answer your question without knowing those answers, but regardless, check out Image > Image Size and adjust the resolution there.
-- For print, set Resolution to 300 pixels/inch, and set the dimensions to fit your final size in inches, say 5" wide. If the image is not the proper aspect ratio, you will need to crop some of it. Easiest way is to then go to Image > Canvas Size.
-- For Web, set Resolution to 72 pixels/inch, and set the dimensions to the number of pixels wide you want the final image to be, say 500 pixels wide. If the aspect ratio is not correct, follow same above.