Hi there,
Hmmm.. some of this is possible and some would be a little harder to do with the current tool set in EE. Not to say that it is impossible though but you would probably need to get a developer on board to create a module or two depending on just how far you want to take it all.
The easiest way to upload images in my mind is to name them all using a nice easy convention and maybe with the same title as the EE entry. That way you can then easily dynamically pull out the image name when needed.
Say you had an entry called :
Me At The Docks
You could then upload an image called :
Me_At_The_Docks.jpg
and EE can easily use the title of the entry along with the required ‘.jpg’ suffix to get the image that you need. That takes care of the first part.
Watermark and thumbnail creation is at the moment not possible (as far as I know) using EE but you can always use phpthumb which can take care of these two items and a whole bunch more!! This can all be dynamically dealt with also so once set up on a template it will work for as many entries as you have in the database.
If you want people to be able to then combine the images with a T-Shirt or mug etc. then it all depends on just how far you want to take this. On a lot of sites you can take the image and place it just where you want on a T-Shirt and so on and so forth. This kind of thing would require some pretty heavy programming to attain this but if all you want is to ask people what they would like the image to be on then when the page is created you can have options in a form that allow people to choose what they want and the price updates accordingly. Still would need some good programming to get it all going but would be about a thousand times easier than the former.
So to answer your question this kind of thing can be handled with EE but depending on how far you want to take it then you may need to program some functions / modules or get a programmer in on the job for you. All definitely doable though.
Also as a word of notice as you will be selling items using EE you will need to purchase the commercial licence to cover this.
Hope this helped a little.
Best wishes,
Mark