To create a group lesson, just add more than one student to the event. However, you can only have one cost or attendance per event. So if a student does not attend the class, you can either make a note of it in the private notes section, or remove their name from the list of attendees before you set attendance.
The lesson notes do not support images. You can attach the image to an email and send it to the group. You can use the school or instrument field to separate your students into groups which will let you use the email filter to quickly bring them up. Another option, is to upload the image to your File section and make it available to the students after login, or on your website. A final option is to just upload the image directly to any page on your website.