I have done an A5 book layout with MS word with Illustrations for Children. You will format your page by as either A4, A5 etc. Most people in the print industry seem to prefer the jpg format.
If the pictures are already digital in the computer, use the 'Insert' menu, got to 'picture'. A window will appear and you can import the picture. It is likely to be oversize so you will resize by pushing the corners (never the middle as you might distort it.) When you click on the picture, you will get more functions on your menu to crop, wrap with text, send to back etc. So if your question was if you can PDF them after this, yes you can. Pagemaker programme gives you more freedom to layout a children's book.