The tagging features and the ability to just paste a picture in a markdown file are the things that bring me back to Obsidian instead of VSCode
Same. Have you tried https://foambubble.github.io/foam/ ? It does some of the things Obsidian does, but is a VS Code Plugin. I really like that combination.
Have you tried https://www.dendron.so/ ? I think that was aiming to be a knowledgebase in vscode