File size reduction on Excel for Mac doesn't work

I had problems with file sharing on Numbers (file corrupted after failed save). I recovered the file by exporting as Excel and the data reappeared with integrity but minus the compressed images in the previous file. I have to rebuild those into the new Excel sheet. I'm using images to maintain a low-rez inventory of products. For 300-400 lines this clearly is unmanageable in their original 400kb jpeg state. Therefore, trialling the first 20 I found that the file went from 31kb to almost 70Mb.

I would appreciate help/comment on two factors:

1. why does the file massively increase in size despite the newly imported images being no more than 10Mb suddenly become almost 7x that?
2. does anyone have experience of the 'reduce file size' Excel function on mac doing absolutely nothing and if so, did you find a workaround? I've tried adding the 'Picture Format' function but it doesn't seem to include reduce file size any more.

The Excel version I am running is 16.92 on a MacbookPro M3. Of course I'd be happy to switch back to Numbers but the collaborate function mess put me off (see other threads on this topic).

Thank yoh,