First, I'm assuming you're creating an InDesign library by choose File > New > Library and saving this file to some common location like a server.
When you add an image to a library you're only adding the image frame and information about where the image itself is stored. The image itself is not part of the library; otherwise it would be too large. When you use an object from the library which has a linked image you still have to establish a link to the image itself.
If you add text to the library, then use that text in another document, there is no link to the original text. If you want a linkage, you have to use the Edit > Place and Link command or use the Content Collector/Placer tools where you can create such a link. That is not a feature of an InDesign library.
It is possible to create links to graphics with a CC Library, but you said you're not allowed to upload assets to the cloud.
Thank you very much for your speedy reply.
Yes we need to stay off the cloud completely which is making things more difficult.
All images that we add are being sourced from particular folders so we are fine with these. Its more creating the image in indesign first. I have just tested your place and link example for an item created in indesign. I managed to link two or more together on the same document which is great but struggled to link the same object/image to another document. Is it not possible to attach the linked image to the library and use this or would we have to create a separate image and place it via a folder.
Would you recommend 2015 to help this along or is there not much difference.
Never been a fan of InDesign libraries. I use snippets instead.
I wrote this several years ago, but I'm still a fan of this method but you can use a network folder instead of a dropbox folder.