Due the rewrite of Pages v5, about 100 features and functionality are missing from the prior release of Pages, the original that now resides in your /Applications/iWork '09 folder. My recommendation is to use the older, but more functional Pages ’09 v4.3.
If you want text to flow over a background image in Pages v5, do the following:
- Under the Format panel Arrange tab, set Text Wrap to None.
- Drop your image in your document and position it where you want. Even opaquely over existing text.
- Menu > Arrange > Section Masters
- Select Move Object to Section Master
- Make Master Objects Selectable
Immediately, your image is now in the background with yellow grips, and any existing text is above it. At any time, you can move or resize that image behind the text.
Still suggest you retreat to the older Pages though.