The term "digital image" usually refers to raster images; also called bitmap images. A raster image is formed from a two-dimensional array of picture elements (pixels on a screen or dots on a print), arranged in a fixed number of rows and columns. An image file contains a digital value for each pixel/dot that represents its brightness and color.
When an image is displayed on a screen or printed, the row and column spacings of the pixels/dots can be changed. Dots per inch (DPI) is a standard measure of row/column density of the pixels/dots, which is linked to image resolution.
Manually resizing an image in a page layout changes its DPI value. Conversely, changing the DPI resizes an image - reducing the DPI spreads the rows/columns further apart, which increases the image size and decreases the display/print quality. The individual dots may start to become visible.
The DPI setting for a paper print typically needs to be considerably higher than the pixels per inch (PPI) measurement of a video display to achieve similar quality output. This is because a printer usually has a much smaller range of colors available for each dot than a screen, and means that even if images look reasonable on screen the printed results may still be poor. Commercial print shops often require images to have a DPI above a minimum limit, for example 300 DPI, to ensure reasonable print quality.
If you increase the size of an image in your page layout so that its DPI value becomes too low, the best solution is to use a replacement image of higher resolution (containing more row/columns of dots). If this is not available, an alternative is to resample the image, which means rebuilding it from scratch to create a brand new set of pixels/dots. There's usually a quality loss associated with resampling, so use this as a last resort and avoid doing it more than once per image. iStudio Publisher can't resample images - you will need to use a separate image processing application for doing this (Photoshop, or similar).