You haven't said whether you are using a local e-mail client or web mail.
Q1:
Assuming that you are using Outlook Express:
Open the Address Book
Click File/New Group from the menu
Give the Group a name
Click the button "Select Members"
select the people you want to add.
When you want to send an e-mail to all the members of the group, simply put the name of the group in the "To" field.
Q2:
When creating an e-mail, instead of clicking the Attach button, click Insert/Picture at the position where you want the picture to appear.