Displaying Thumbnails and Full-Size Images

A few more details:
In the macro I selected the full scale to be 6 inches wide.
The line commented out would set the size 8x the size of the thumbnail.
In the demo file, I assigned Alt+T as the shortcut key.

Feel free to modify the macros to suit your needs.

Bob: if you read this please let me know if it was usable for you or if you have any questions. You can e-mail me directly.

It took me a while to digest suggestions in this tip and come up with an approach that may be closer to what Bob asked for, without resorting to having a second object (picture) somewhere and linking to it.
For my proposal to work without risk of degrading picture resolution you need to check “Do not compress images in file” (Word Options – Advanced – Image Size and Quality). You can do it for the particular file or for “All New Documents” created in the future. I also set the default Resolution to High Fidelity, just in case.
What I propose will use a macro saved within the document, so you need to save the document as .docm:
1. Place each of your full size pictures as floating images with “Text Wrapping” set to In “Front of Text.”
2. Move each image so that the left edge is close to the edge of the page. It will be fine-tuned later.
3. Position the picture (still full scale) on the page where it will be close to the relevant text. Make sure the image does not extend beyond the page. Make sure to follow the steps below to fix the top left position of the image. When re-scaled to thumbnail size, the top-left corner of the image will stay where it was.
4. Fix the position of the picture on the page: Select the picture, click on the layout options (small icon to the right of the picture) and select Fix position on page.
5. Rescale the image to fit within the margin using “Size and Position” dialog box (available when you right-click on the picture). I set the Width of my pictures to Absolute 0.8”, and the horizontal position to Absolute position 0.15” to the right of Page. Make sure that the “Lock aspect ratio” is checked, although the macro will force it anyway.
6. While I suggest that all thumbnails are kept the same width to fit inside the left margin, you must decide at what size you want to display the full-scale images. For ease of use you can select either 100% of original size (if it fits on the page), another percentage of original, or a specific width in inches. This will be hardcoded in the macro and will apply to any image you select.
7. It is best to assign a shortcut key to run the macro (you can find out how in other tips). To use the macro, click on (select) the image you want (single image only), and press the shortcut key, The macro will check the size of the image; if it is wider than 0.8 inches it will be scaled down and become a thumbnail, otherwise it will be scaled up to whatever size is specified in the macro. Essentially, it toggles the size.
8. Actually you can skip resizing your images to thumbnails in step 5, just use the macro on full scale images once they are positioned.
I have posted a demo document for this approach in my OneDrive and you can access it via the following link:

https://1drv.ms/w/s!AnwQtlPv1u28gvln9vytqk15Z5nOCw?e=jzV2YW

Because it is a docm you need to download the file and open it in Word desktop application, it does not work in web version.
As a bonus, in the demo, I have added a macro that will run when you close the document and it will check the sizes of all the floating mages in the document; If any of them is wider than 0.8 inches you will be asked if you want to reset it to thumbnail size.

Now, Here is the macro:

-----------------------------
Sub ZoomInOut()

    If Selection.Range.ShapeRange.Count <> 1 Then
        MsgBox "You need to select a single image!", vbCritical
        Exit Sub
    End If
    If Selection.Range.ShapeRange(1).Width > InchesToPoints(0.8) Then
        Selection.Range.ShapeRange(1).LockAspectRatio = True
        Selection.Range.ShapeRange(1).Width = InchesToPoints(0.8)
    Else
        Selection.Range.ShapeRange(1).LockAspectRatio = True
        'Selection.Range.ShapeRange(1).ScaleWidth 8, msoFalse
        Selection.Range.ShapeRange(1).Width = InchesToPoints(6)
    End If

End Sub

Thanks, Allen.
I wondered whether there was any advantage to putting "each full-size image in its own document " rather than just linking to the original graphic file, so I carried out a brief test of the two possible methods. (Environment: W10, MS-365).

In both cases, Word came up with a message warning me that the link would be opening a potentially harmful document and asked me whether I wanted to continue.
On continuing, in each case, the application associated with the file (on my computer, IrfanView in the case of the jpg and Word in the case of the docx) was used to open it and displayed it.

My preliminary conclusions were

The downside of putting each graphic within a docx file is a small increase in the size of each file. The upside is that it can be formatted and displayed as one wishes.

The downside of simply linking to each graphic in its original file is that one has little control over what the user will see because one has little idea what software is associated with the graphic on the computer used. A further consideration is that the danger of the file being inadvertently deleted is possibly higher than it would be if it were in a docx file. It would be advisable, in any event, to put these external files in the same directory (folder) as the master document and use names which make it clear that these are subsidiary files of the master docx file.

HTH