Thumbnails can be embedded in HTML as explained in this link:
https://knowledge.safe.com/articles/1176/embedding-images-in-html-with-fme.html
However, it would be good to have this included in the HTMLReportGenerator. Maybe as part of the table or as a stand alone option. The images that are embedded are often not large enough to show detail and cannot be opened in a new browser by clicking on it.