Using Categories as Pages

Hi there,

I’m a complete newbie and need some help.

I’m creating an online portfolio using the Spun theme. From other threads, I’ve gathered to get what I’m looking for, I need to use categories.

I’ve been fiddling around for a while and have kind of gotten the hang of it all, but I have no idea which of the following is easily accessible from a setting or if it would require code.

The site needs the following:

Home page containing circles that link to top level categories (i.e. bake, paint, draw, etc).
Each category circle links to a page with circles of sub-categories of the top-level one (i.e. bake contains cakes, cupcakes, cookies, etc).
Each sub-category circle links to a page containing all posts relating only to the sub-category. (i.e. cakes would contain all the posts I filed under cakes)

In addition to that, it would be ideal if each of the top-and-sub-level category circles were able to display an image with text rather than just the grey circle with text.

I definitely want to have all circles in greyscale and have them change to colout when hovered over.

I have a free WordPress account and do not have the funds to upgrade, so I’m not sure how much of the above is limited by my account type.

I’d appreciate any and all help possible!