If you press the help button and follow the link to "resource standards", you'll see that the maximum width is 200, which is less than the width of 214 which your image has:
So, just use a smaller image.
You could in theory bypass this limit by directly copying the file into the "Monster" folder (or, if you need to set transparency, import as "Picture" and then move from the "Picture" folder to "Monster" in Windows Explorer), but then it's not guaranteed to render nicely in all circumstances.
I really wish my game was far enough along for it to be actually playable beyond certain aspects. I think I've crafted a really fun battle system thanks to ATB, fighting game, and Boost point mechanics.