all of these are pretty basic issues.
for file upload to work properly, the forms encoding type needs to be set to multipart/form-data.
If you manually change the input type="text" to type="file", dreamweaver wont make this change for you. If you use the Insert -> Form -> File Field menu to add a new file field, the encoding type will automatically be changed. To change it manually, select the first text in design view, then in the Tag inspector at the bottom of the design view window, select the form tag. In the property inspector, change the encoding type.
the problem you are having with the HTML editor is that the insert and update behaviors are expecting an element named "artist_bio" but you have named the HTML Editor instance "bio", you will need to change the HTML Editor instance names to "artist_bio" instead to match what the insert and update are expecting.
on the update page, the HTML Editor content is being converted to HTML because of formatting on the initial value, when you edit the instance name on the update page, also re select the initial value. Next to initial value, click the lightning bolt, expand the "WADAartist" recordset and select the artist_bio column.
for the issue of overwriting the images on update, there is a tutorial on the DataAssist support page titled "How to apply Digital File Pro to DataAssist Insert and Update pages" that will walk through the steps you need to follow: