> Embedding images into the page was a killer feature for HTML

I'd disagree slightly. Users did not have the high bandwidth always on connections then that they do now. Images were nice but were also avoided as they made pages "slow". The main reason lightboxes and other clickable thumbnails came into existence.

> was still doggedly text based because they were still supporting the VT100 users

I used lynx and links for a very long time. What made me switch was the prevalence and ultimate utility of JavaScript. It turned simple pages that were best consumed after being fully downloaded into complete progressive applications.