Small thumbnails on blog post

How can I get a small thumbnail/small featured image (200×200 or so) next to an entry on the default blog page? The featured images not only are huge, it upscales them (which makes for really ugly images), and the big black overlay is visually jarring.

On a separate blog page, I can use the smaller layout, but those images are still a bit too large (and not square), still upscaled, and still have the black overlay. (and I can’t figure out how to apply that template to the default blog page anyway).