My initial thoughts on this led me to three possibilities.
Firstly, I suspect that images objects are (for some reason) set to automatically go behind the text. However, you state that this is not the problem as you have covered this when you mentioned having tried "other settings".
Secondly, I suspected that the opposite happened: your text is (for some reason) set to be in front of all other objects.
Finally, your default Word settings may set all pictures with an anchor which 'holds' it in place, behind all text.
Whichever it is, I would like to suggest the following:
- Select the image with your cursor (single-click). If you cannot reach the image, Select the
Home tab, then from the far right of the menu / ribbon, select 'Select' and select 'Select Objects'. Now, you may click on the image even if it is behind text and select it without any difficulties.
- Cut (
Ctrl + X)
Alt Gr + V or
Home tab on ribbon, collapse
Paste menu and
If this fails to work, attempt it with the other picture formats. The reason I suggest JPEG is because it retains the most pixel information over all other formats and makes for the best-quality of image possible.
Another thought as to why this has happened could be linked to the program you pasted from (MS Paint). If you did a straight
Paste, then it may have pasted some horrible formatting code along with it which hasn't been decoded properly by Word.
Give this a go and let me know what happens.