I haven't messed around at all with Ordinals (although I really should have ages ago!). That said, I believe they're essentially the same as Ethscriptions in that you can put anything you want there -- meaning, yes, they're usually made up of on-chain images -- usually pixelated or simplistic to keep fees low (as you wouldn't want to store a high-res JPG on-chain). That said, I believe you CAN also store HTML or Javascript, which could be used to point to images stored elsewhere (such as Arweave, IPFS, or even centralized sources). Whatever you inscribe is on-chain, but that could be either an image OR code. So... yes and no, depending. :-)