When I insert an image or video into an article using the editor, the image or video is added to the document, but its not placed in line, is there a way to do this other than adding it manually into the code? Or is this a feature of K2 to have items separate from the content. I'm new to K2 and just getting to grips with it.

Hello,
You should use the Image, Image Gallery and Video tabs to insert your extra content.