This is one of my forever-projects. So far it’s totally just a start but when keeping it un-published even its useful parts ain’t doing any good, and the matter is a concern for everyone at one time or another, so FWIW:
Every way to use images in TiddlyWiki: https://images.tiddlyhost.com/
Please share additional solutions that you have on the topic so they can be added. And the menu structure you see there is definitely not holy: It attempts to capture the parameters that image use depend on. A later idea is to make some search mechanism or wizard so the user can zoom in on the optimal solution for the use case.
I am hoping that this content eventually can fullfill the quality standards to be transferred to tiddlywiki.com …but, frankly, it won’t reach those standards for as long as we don’t have a simple-to-use solution for people to collaborate in building TW’s like this one. But, as noted, in this case even a half-baked compilation is better than none so do please come with bits and pieces and I’ll incorporate them.