Computer graphics come in two broad types: bitmaps and vectors.
Bitmaps (also known as raster images) are a bit like a piece of graph paper where you can fill in each square with a color, but you have to fill it exactly and you can’t draw lines or do anything else but fill in squares. (Each square on the graph paper is called a “pixel” in computer jargon.) Digital cameras capture photographs as bitmaps; a 12 megapixel camera creates a grid of 12 million tiny squares and colors each one with a single color to make up the picture.
Bitmaps can only used for engraving on the Glowforge. (The laser will move back and forth across each horizontal row of squares, adjusting the power of the laser to reflect how dark the color in the square is.)
Vector graphics are more like drawing lines with a pencil on a blank sheet of paper. You can draw any shape you want.
The Glowforge will move the laser to follow the shapes of those lines, allowing you to score or cut out shapes.
JPEG, PNG, GIF, BMP, TIFF, and similar file formats can only store bitmaps and thus can only be used for engraving images on the Glowforge.
SVG and PDF can contain both vectors and bitmaps. Any bitmaps contained in one of those files can only be engraved, but vector shapes can also be cut or scored.
When you copy and paste a bitmap image (e.g., a JPEG) into an SVG it’s still a bitmap. You need to use a vector editing program (Inkscape, Illustrator, Affinity Designer, Corel Draw, etc.) to draw your vector shapes.
Some programs have an “auto trace” mechanism that will look at a bitmap and try to find the edges of shapes and turn them into vector lines for you.