Okay, so I managed to upload and include an image in the FAQ today. The process was far from ideal however. This is how I managed to do it, please tell me if there is an easier or better way.
1) Clicked the gold icon to upload a file.
2) Uploaded the image file, which for some reason has to have its own page and category.
3) Inserted the file into the page in file tags, which caused the page to refresh losing all the other edits I had done to it.
4) Opened the page for the file so I could retrieve the URL for the image.
5) Added the image inside img tags.
6) Deleted the file page link originally created when uploading the image.
7) Save the changes.
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