Best way/place to upload images?

I’m a newbie, trying to figure out the best way to include images in my blog posts. Here’s what I’ve done so far: I create a new folder called wp-uploads and set my options to make this my upload directory. So, when I first upload the image to the folder and then create the post, which references the image.

BUT, I see there are some plugins that might help me to do this process better. I see several, but not sure if there is a clear winner. Can someone please offer me a suggestion on which route I should take, and also if there is a best folder to put the images in?

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Also, is there a good, lightweight program that I can download that is made specifically for capturing a screen, cropping it and creating/optimizing an image file for the web?