You can get around the size limitation by using externally referenced graphics. You use something like
title : jpeg "my.jpg";
This will not render in the editor, but when you compile the game, the jpg file should be in the same folder as the compiled html.
Itch will allow you to upload a zip file for HTML game project that contains the html and the zip file and any subfolders you require. Just select the two files (assuming windows), right click, and "add to zip folder". You can also reference an external URL in the jpeg section in the graphics section, but not recommended as you'd have to host your own graphics.
Chris