pictureBox zoom onpaint only applying to rectangle

Question

I am trying to understand the complex GDI module.

Below, I have some code that allows the user to zoom in and out on pictureBox but it is only doing it to the rectangle. It only works if the mouse is over the small rectangle drawn by GDI. How you please show me how to apply this effect to the actual image loaded in the pictureBox? These images have resolutions upwards of 7200 x 4800.

Here's the code.

private Matrix transform = new Matrix();
private float m_dZoomscale = 1.0f;
public const float s_dScrollValue = 0.1f;

public Form1()
{
    InitializeComponent();
}

private void Form1_Load(object sender, EventArgs e)
{
    Image image;

    // open file dialog
    OpenFileDialog open = new OpenFileDialog();
    // image filters
    open.Filter = "Image Files(*.jpg; *.jpeg; *.gif; *.bmp; *.tiff)|*.jpg; *.jpeg; *.gif; *.bmp; *.tiff";
    if (open.ShowDialog() == DialogResult.OK)
    {
        image = Image.FromFile(open.FileName);
        pictureBox1.Height = image.Height;
        pictureBox1.Width = image.Width;
        pictureBox1.Image = image;
    }
}

private void pictureBox1_Paint(object sender, PaintEventArgs e)
{
    Graphics g = e.Graphics;
    g.Transform = transform;
    Pen mypen = new Pen(Color.Red, 5);
    Rectangle rect = new Rectangle(10, 10, 30, 30);
    e.Graphics.DrawRectangle(mypen, rect);
}

protected override void OnMouseWheel(MouseEventArgs mea)
{
    pictureBox1.Focus();
    if (pictureBox1.Focused == true && mea.Delta != 0)
    {
        // Map the Form-centric mouse location to the PictureBox client coordinate system
        Point pictureBoxPoint = pictureBox1.PointToClient(this.PointToScreen(mea.Location));
        ZoomScroll(pictureBoxPoint, mea.Delta > 0);
    }
}

private void ZoomScroll(Point location, bool zoomIn)
{
    // Figure out what the new scale will be. Ensure the scale factor remains between
    // 1% and 1000%
    float newScale = Math.Min(Math.Max(m_dZoomscale + (zoomIn ? s_dScrollValue : -s_dScrollValue), 0.1f), 10);

    if (newScale != m_dZoomscale)
    {
        float adjust = newScale / m_dZoomscale;
        m_dZoomscale = newScale;

        // Translate mouse point to origin
        transform.Translate(-location.X, -location.Y, MatrixOrder.Append);

        // Scale view
        transform.Scale(adjust, adjust, MatrixOrder.Append);

        // Translate origin back to original mouse point.
        transform.Translate(location.X, location.Y, MatrixOrder.Append);

        pictureBox1.Invalidate();
    }
}