Hi there Rockin__,
To confirm, are you not seeing images in Apple Mail in another user account on your iMac? If needed, you can create a test user to try to see if that happens there too. A new user doesn't have custom or changed settings, and can help determine possible next steps by isolating this further. If needed, this article shows how to create a new user: Change Users & Groups settings on Mac - Apple Support. Does the same issue happen in a new user as well?
Another option is to test on a different device with the Mail app. Let us know how that goes, or if you have any questions.
Take care!