First, thanks for letting me know about the Advanced Text Widget…didn’t realize it until I just went to the plugin page for it and now WordPress has a notice there that it hasn’t been updated in a long time. I don’t use that one anymore, so a text widget it fine. To disable the titles though, another plugin Hide Widget Titles is what I use.
As for your request…absolutely you can link the images to anything. Just wrap the image tag with a link tag. http://www.w3schools.com/html/html_links.asp
** I also moved this topic to the Encounters forum category.