Adding pictures / using the web folder

Todays newbie question seems rather obvious but it does not work for me. I have a db with 12000 pictures referenced to it. I want to let people look at this db via a web browser so I thought of putting them online via IWP.

I have read that all pictures must be in the web folder of FM which I have done. The problem is 2 fold:

1. The pictures don't show but my pdf file links in other containers work fine so I know that the files sort of work. I also get blank picture containers and not a message that the files are not linked, so I figure that they are sort of there.

2. The db file is in a folder that also holds hundreds of subfolders, that contain the pictures. If I move the db file, all the relative links go (12000 of them) so I am obliged to keep the db in the web folder. Is this normal?

Is there a size or file size limit? does the web folder look for pictures in subfolders?

Many thanks