Yes, this is a known problem - since there's no toolbar, there's also no way to see which mode is currently on. I suggest we do it together with the text formatting toolbar (it'll be inobtrusive, I promise;)

For inline images, please vote here: http://roadmap.cintanotes.com/topic/185531-imagespictures-inside-notes/

Yes, probably something like that

Really nice suggestion, Chris! However, it will be important to make this 'toolbar' inobtrusive, so that it won't distract from the note itself.

Sorry for being slow, but slow is better than a dead project - and CintaNotes by no means is dead yet :) Currently there are 26 ideas which have a higher score, so as you can see, even with an army of developers it would take a while. But you can do something about it - e.g. tell all your friends about CN and get them to vote for this feature!

Why not use the merge command (Ctrl+M)?

Currently it is planned for the Jan-Feb 2014

But there already exists a section selector in the note editor window, or didn't I get the idea?