Inline images from placeholders

How do I insert an image into a document using the <$img> placeholder and have it display between paragraphs? What I need to do is something like this:

this is paragraph one
this is paragraph two

When I do this now after compiling to a PDF the image is displaying on top of one of the paragraphs and breaking up the text. I need for it to be displayed inline between the paragraphs. Lastly, how do I tell the compiler that if paragraph one from above goes toward the end of the page that when <$img> is displayed on the next page to move down a bit so that the entire image is shown?

Unless you are using some kind of Markdown processing to produce the PDF, where one empty line is required between each paragraph, then your image probably isn’t actually inline with any paragraphs around it. You should click into the line it is on and check Format ▸ Paragraph ▸ Line and Paragraph Spacing… to make sure the settings aren’t forcing the line to be a certain height, no matter how much content is on the line.

I suspect that may also solve the other problem you describe.