
If you want your image to display in the middle of some text, you need to Embed the image into the actual e-mail, and it's extremely easy to do. This is totally different to Attaching an image and if you embed it, you DON'T need to attach it as well. The image is stored hidden right inside the e-mail as a series of numbers, which is how digital images are constructed.
Step (1) Place your cursor where you want the image to appear in your text (so you can merge it into the text) then click Insert from the Top Menu and select Picture...

Step (2) Click Browse, then navigate to where your image is stored on your computer:-

Step (3) Now select the image you want and click Open, then the attribute box will re-appear.

You can either just click OK, or select some of the other optional image attributes?
Of course, you have to send your message in the default setting of Rich Text HTML or it won't work. If you have altered the setting to Plain Text, you'll need to alter it back. Create a new e-mail to yourself and try them all out. You can't hurt or damage anything. Happy e-mailing!