This is an example of the responsive, user friendly HW Image Widget available for WordPress 3.5 and up. Its free for download from WordPress.org.
Did you know it sports the TinyMCE WYSIWYG editor for the text?
You are using Nginx as your web server. When uploading large files to the media library you get an “HTTP Error” message. When switching to the old fallback uploader you get “413 Request Entity Too Large”.