Cannot set other resolution at VirtualBox guest: Elementary OS
Solution 1:
I'd suggest to update the Guest additions with the VM package manager. So login first into your VM and open a Terminal to type:
sudo apt-get install virtualbox-guest-dkms virtualbox-guest-utils virtualbox-guest-x11
Finally restart the VM to complete the installation.
You should get higher resolutions using the guest additions provided by the packages.
Solution 2:
As Sylvain already explained, you need to install guest-additions on the guest. This can be done as he suggested on Debian based guests but a more general approach is to press Host+D or select the "Insert Guest Additions CD image" from the "Device" menu (shown here with an Ubuntu guest):
Once you have done that, follow the on screen instructions. The details may vary depending on the guest OS but this will always allow you to install Guest Additions, whatever the guest happens to be.