Does an image have to be in "Photos" to be accessible by Pages? I am trying to get pictures from my OneDrive or SD card

No.

The image below is a screenshot of a page in a Pages word processor file. The photo is a .jpg file saved in an ordinary folder on my MBPro. It was inserted on the page using the "Choose" option in the Insert menu, then navigating to the folder and selecting the file. The screen shot was taken after the photo was placed on the page, but before it was deselected, hence the 'handles at each corner.

After inserting the photo. it was sre-elected, and one of those handles was grabbed with the pointer and dragged toward the centre of the picture, reducing its size. The photo was also dragged upward on the page to put more text below it, and the text wrap setting was changed from Automatic to Around to flow into the space beside the photo.

Regards,

Barry

It is my understanding that every object saved to Microsoft's OneDrive is automatically encrypted, and for it to be unencrypted (and usable) back to the macOS filesystem, one must use the current Microsoft OneDrive application on the Mac. It is in the Mac App Store.

That said, if it is an image format that Apple's Preview supports, then it can be dragged and dropped onto an open Pages document. The image does not have to be in Apple's Photo application or sourced from the Media toolbar item.