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I think you may have selected to always use Google photos to crop pictures instead of our app. Go to Settings -> Apps -> [menu] -> reset app preferences and when you then select a picture as wallpaper you should have "Crop" as an app to select.
You can set the default xperia theme which will be kind of interactive.
What's the resolution of the picture you want to use as wallpaper? If you use a picture that has the same resolution as the phones display, 1920x1080 it will not scroll. But if you use for example a picture taken with the camera it should scroll.
You need to crop the height on the picture when you select it as wallpaper in that case. When you select a picture, select the option "Crop" and then reduce the height.
Glad to hear that 