To edit content you must click on the “wrench + screwdriver” symbol (blue box) first to enter editing mode. You have to do this every time you want to enter edit mode (e.g. if you were before in pen mode). The first time you have to log in unless your credentials were stored by “remember me”. Only then will the editing tools.
Then you click on the add image button (red box).
This windows allows you to upload images. The meaning of the sizehint is explained here
You can also drag images either from the browser or from your computer directly into the collection area in the right. Ctrl-C/Ctrl-V (PC) in the collection area is also supported. In this case, the full size image is uploaded if the image fits onto the canvas otherwise its is rescaled to about 80% of the canvas size. You can edit the size by double-clicking the image in the collection or using the context menu (right-click).