I upgraded to MacOS Monterey but emails wont download the pictures. Tried a couple of options to correct but unsuccessful..

My Monterey 12.0.1 defaulted to not automatically downloading remote content which included pictures imbedded in the email. When I click "Download External Content", or similar wording, the pictures were displayed. This has held for 12.1.

Pictures as attachments were never altered or delayed in any way. If your Mac mail is not getting attachments, either the sender is having a problem on their end or some standard feature is missing from Mac mail on your end which may indicate a reinstallation of the OS is needed.

If you're still on 12.0.1, the advice to go to 12.1 is good advice.

Try updating to 12.1. Some people who were affected by this have reported that the update fixed it for them.

Apple Mail >> Preferences "Privacy " tab and disable various of the setting and test