I have had lots of experience of precisely this problem. I sympathise.
First of all, yes, you can try to use Word as a DTP program, just as you can try to mow the lawn using nail clippers. That doesn’t mean it’s a good idea. It involves a lot more time, effort and hassle; you are trying to use a tool to do somethng it was never meant to be good at doing; and you will produce inferior and probably dissatisfactory results that people will blame you for, rather than blaming the fact that you were told to use the wrong tool for the job.
I can more or less guarantee that, supposing you ever do manage to complete this task using Word, someone will later make disparaging remarks about the work you’ve done, hold up something that was obviously laid out properly using a DTP program, and say ‘We wanted something that looks more like this’. If you try to explain, they’ll just give you a withering look and mutter, ‘It’s a poor workman who blames his tools’.
So, first of all, I’m perfectly aware that you have said you have no choice in the matter, but I would revisit this situation. Examine if there really IS no other option, and if not, then explain to other people BEFORE you do the work why it’s NOT a good plan and why the results WILL suck. Present them with the alternative, positive plan (getting it done properly, using the right software) and make them choose in writing.
Secondly, do NOT try to reproduce the kind of tight integration of text and images that you can achieve easily with DTP. It can be done, but it’s more time and trouble than it’s worth. There’s more to life than sitting up half the night dealing with the sucky way Word mangles page layouts.
Lay out the text however you want it. On any given page, put the graphic or graphics in their own separate boxes, that you can size and shape as you like. Put this / these at the bottom of the page, in their own area distinct from the text. In the text, if you need to refer to the graphics, use simple references such as ‘…as shown below left’ and ‘as you can in the illustration below right’. Keep it SIMPLE. Keep it EASY. By separating the page elements like this, you should find you don’t have too many problems.
Any more effort than this isn’t worth it. If anyone else thinks it IS worth more effort, they can do it themselves.
Conversion to .pdf… these days, this should work relatively effortlessly. Warning: at times in the past, with earlier version of Word and Acrobat, the conversion process was prone to a lot of glitches with long documents. Pages could creep, paragraphs could skip pages, line spacing could get glitchy. If your doc isn’t long, you should be okay. If it is, consider splitting it into smaller ones, and check that the conversion doesn’t give rise to any intolerable glitches.