I followed what you had done and on a Text Item where I had inserted an image before I did find I was able to add text to it. But Version 16 had much more flexabilty in that you could move the image around on the page, you weren't stuck with where the program put it, you could even place text at the side of the image.
In FTM2010 I saw that if I clicked on the image a set of what appeared to be resizeing handles would appear but you can't do anything with them. On a page where their is plenty of what space around the image, if I tried to move it the only place you could put it was on the next page. I know you can CTRL X the image and then repast it but your placements are limited.