The Atom API, as implemented by Blogger, is somewhat limited in functionality. Other Atom implementations at other sites enable more detailed categorization of posts and image attachments. These are things that Blogger supports through their human web-based interface, but not (at least, not yet) through their APIs.
That doesn’t mean that activities such as attaching images to blog entries programmatically is impossible, but doing so will require some manual coding on your part. Blogger helps by providing a list of all the known third-party apps that interact with Blogger in some way. Because many of these apps are open source, you may find some inspiration in browsing their codebases. As always with web-based APIs, the toolset provided may be simple, but that simplicity mixed with a little creativity can result in some truly impressive tools.