Not an answer, but a few observations:

• using jpg for an image with text in often brings in fuzziness – see http://en.wikipedia.org/wiki/Compression_artifact: try .png
• if you want to use a vector format, use .eps – but be aware that until you then save/print your Word file as .pdf, all you'll see is the (fuzzy!) .tif preview
• you'll get better results by resizing the image outside Word, so that it remains unaltered when you import it: how Word decides about rescaling images is a mystery to me

I'll let more knowledgeable contributors run with the placement and cropping questions