I found out only by experimenting.
Yes, Lubby; Link Inline Image... is the method to place images within a post. Here are some examples. My grandaughter Alice will demonstrate.
Inline display attachment...
[attach=#]
We have an automatic limit imposed on images here. This is to reduce the risk of large images being posted (which take up server space, take too long to download and threaten to distort the page layout). These choices allow the poster to decide not only where the image appears, but also its size.
Inline fullsize attachment...
[attachimg=#]
Fullsize means what it says: it allows an image to appear even if it is above the limit on size.
Inline thumb attachment...
[attachthumb=#]
Thumbnail provides the image at the set maximum size.
The other two are for other types of files, rather than images.