While you can "size" an image in html that just changes the display not the actual file size. I have seen novice webmasters use up their hosting allowances by uploading images straight off their digital cameras which are several megabytes in size and use them in circumstances where a 20 or 30 kilobyte file would be sufficient.
Get a photo editing program and either create standard thumbnails, any good program will have an option for this, or crop and resize the original images. For the basics there is some excellent free software around, you don't need to pay a fortune for the big name product.
The tag for images is img by the way. You can wrap a pair of anchor tags around an image in exactly the same way as you can around text. A table (TABLE, TR and TD tags) provides a quick and dirty way of laying out your pictures although there are better ways that require a slightly deeper understanding of html and css.