Can't find this answer in the RH Help. Is there a special way to insert an inline image within text, for example in the middle of a pargraph? Here is an example of what I'm talking about, scroll down to the green cable drum icon.
I've been able to achieve this effect by inserting the image in the paragraph and resizing. But I'm not sure if this is the correct method.
Yep, you are doing it correctly. But I might take some issue with the "and resizing" comment. It's never a good idea to resize the image inside the topic. The quality will always be horrible and the image will take longer to load from wherever it will live at the time your user accesses it.
Assuming you are happy with that result, I'd say go for it.