There is a 5 photo limit with the photos app. The workaround for that is to add the 5 photos in the photos app, cancel the email - but save the draft - open the draft in the mail app - and then copy and paste the other photos that you want to email into the body of the email. It's cumbersome, but it works.
The only reason that I can think of as to why you are not getting the option to reduce the images size is because the images aren't large enough to necessitate reducing. that just doesn't make sense though if you are trying to email 5 photos at a time. Those 5 photos would have to be large enough to bring up the "images" option.
So why don't use just try two really basic troubleshooting steps - quit the photos app completely and restart the iPad and then see if the option pops up for you.
Go to the home screen first by tapping the home button. Double tap the home button and the task bar will appear with all of your recent/open apps displayed at the bottom. Tap and hold down the app icon until it begins to wiggle. Tap the minus ➖ sign in the upper left corner to close the apps. Tap the home button. Restart the iPad.
Restart the iPad by holding down on the sleep button until the red slider appears and then slide to shut off. To power up hold the sleep button until the Apple logo appears and let go of the button.