You can solve the fiddling by replacing the whole UI with markdown. Oh, how will he push images to his liking then? Easy: {{image: cat2.jpg, left}}
Ok. and howto make it fit the page and baseline without stretching out of the aspect ratio? {{image: cat2.jpg, fit}}
Make a button for that like the Left,Centered,Right aligned text buttons and you're done. Even better remove the button and make the whole shit context sensitive, so that after dragging a picture you can do actions on it without having to mess with drag&drop. People don't get drag&drop, really, just trust me here. Most people aren't as aware as you about drag&drop and it doesn't always work too. Buttons help.
But yeah TinyMCE is DEAD.