Well lets keep in mind that keystone correction is there to adjust the image by skewing it in a "trapazoidal" way (if it makes sense).
The only reason you would want to apply manual correction is if your projector is not exactly perpendicular to your screen.
If it is pointed down/up at an angle towards the screen, the image would be smaller on either the top or bottom, which I think is what you are mentioning. To rectify this skewed image you can toggle the keystone correction and "distort" the image to look squared off, thus finding a balanced projected image that "negates" the distortion caused by the image projecting at an angle.
The aspect ratio is basically the screen size, in simple terms take for example:
4:3 Aspect Ratio is the squarish shape associated with conventional TVs.
16:9 Aspect Ratio is a common screen shape used widescreen HDTVs.
This will not be affected by the Keystone adjusting and is mostly concerned with your viewing preferences or aspect of the video content.