Today as I was looking at my blog settings page, I noticed under "Select Post Editor", that there's an option to select "updated editor". And voila, now I can place images where I want them! Not only that, I can resize them and move them around.Another bonus - with the old editor, when you save drafts of your posts, and then publish them for instance the next day, the day you started writing your blog was used, not the date published. Now it shows the published date.
Don't know why I wasn't informed of this change. Maybe I was but I missed the notice. Anyway, I'm happy about it and I'm sure my fellow Bloggers are too.
Now if only we could add captions ...