Here's the fix:
* Boot up your NeoGeo VC game of choice
* When it loads with the squished screen, hit the Home button on your Wiimote
* Head into the Operations Guide
* Once inside, plug your nunchuk controller into your Wiimote, then simultaneously press A+Z+1
* You should hear a sound, signaling that the Wii has been set to Interlace mode
Now, once done, all of your NeoGeo games should run fine, meaning you won't have to do this for every game.