What you are setting is the “region” which is used to change what portion of the source sprite is drawn. So if you only wanted the top half of that sprite you could set region to (16,8) starting at (0,0)
Since your rectangle is in a grid container, it will be sized based on the grid container’s properties. If you don’t want that behavior you will want to change your scene organization.
If you do want to “stretch” your square to be longer but want it to scale properly, you should use a NinePatchRect as you can set what parts of the texture are corners or borders and make it whatever size you want without stretching the sprite.