What are the current pixel dimensions of your jpg still images (width and height in pixels)? File size is not the target property here, pixel dimensions are. In video, inches have no meaning. Think pixels. Inches, ppi, and dpi have significance in printing, not video.
What version of Premiere Elements are you using and on what computer operating system is it running?
What are the properties of the video that will be included in this project?
With regard to photo sizing in this type of project, the classical not to exceed suggestions of the forum moderator Steve Grisetti are 1000 x 750 pixels (for SD project settings) and 2000 x 1500 (for HD project settings). When appropriate, I opt to use 1000 x 750 and 2200 x 1238 values respectively. With Premiere Elements 11 and 12 on Windows 7, 8, or 8.2 64 bit, these classical suggestions can be extended to a certain degree. If problems in trying that, then back to the classical thinking. Keep in mind that no matter how great the resolution, the end product is reduced to the standard for the export...in this case, DVD VIDEO standard and standard widescreen both have frame sizes of 720 x 480 (NTSC) and 720 x 576 (PAL).
I would look forward to the opportunity to fine tune the above if you are interested and you supply more information.