Joanne, a lot of your questions are answered in the
Manual.
To read it:
Click Help menu
Click Read Manual
Read the Manual.
Yes, you can add a graphic image in the top half of the lyrics area. Your selection must remain through the entire lyrics area, not just on one page.
KHP is a "Home" product, and tradeoffs were made to keep it simple. I must say, you seem to be pushing the limits hard. You are really getting into this home production aren't you!
FYI: Our Karaoke Pro workstation allows adding graphics in an Instrumental page, then have it remove and the lyrics take over the whole screen again.
In case you are wondering, I have merged all your 5 threads into this one. I felt it best to keep it all in one as your questions are inter related. Just click the New Post button when you have this Thread open, and it will add it here... easier for overall continuity.