Hi @indiedev91
Use the Create HTML Content activity in that you can create your body of the mail. Click on the Insert image and select the image file. It will show as an image in the body of the mail. In the Send outlook mail message activity. In the body option provide the output variable of Create HTML Content, and check the IsBodyHtml option.
Check the below image for better understanding,
Workflow →
Properties of send outlook mail message activity →
Hope it helps!!