How do you make a layout for a story?

I am obviously not the most tech-savvy person so i was wondering if anyone could help me?

I mean, i know where to go to make a layout but i don't know how to add the picture. As in the picture at the top of the screen, not the background picture but the main one. The one that's usually on top of the chapter title? Because when I try to copy and paste from my picture documents, it doesn't want to paste, if that makes any sense.

I read somewhere that you had to make a direct link on websites like Photobucket? Is that true? Because I don't have an account there or anything so can someone please tell me if you know?

Thanks! :)