How to prevent degradation of image quality when pasting for collage?

Question

I am trying to do a collage (of family heirloom old pharmacy jars and bottles) from – eventually – about a dozen separate images in Photoshop CS6.  (A variety of sizes, resolutions, qualities and file types will go into the collage, but I wish to retain the image quality of each component at its original level or very close to the original level, even those in some cases the original quality is marginal.)
I have set up in Photoshop a “background document” at 300 dpi of the right dimensions to paste into my InDesign document (5.1 X 3.6 cm)
I have tried >six approaches, all of which have resulted in a degradation of the subsequently pasted-in image (not just slight, but very obvious).
Clearly I’m missing something fundamental about image quality and handling images so that degradation is minimised or eliminated.
(1) (1)   Using an internet video as a guide – using Mini Bridge to open all the images in PS6 as tabs along the top of the workpage.  Then dragging the first one into the base document.  It comes across huge – ie I only see a small fraction of the image.  Any attempt to Edit/Transform/Scale (to 14% of the pasted image, which in this case is a jpg of 3170 x 1541 at 1789 dpi, 4.5 x 2.2 cm) results in an image that looks horribly degraded compared with what I pasted (open in another window).
(2)   (2) Same thing happens if I have each image as a new layer on top of the base document.
(3)  (3)  I tried changing the image that I had put into Layer 2 into a Smart Object and then resized it.  No further ahead – it still looks horrible.
(4) using a different image [an 800 dpi JPG 3580 x 1715  Pixels, print size (from dpi) 11.4 x 5.4 cm which despite those parameters is of barely acceptable quality] I have tried (a) changing the resolution to 300 dpi, (b) keeping the number of pixels the same (which results in a dpi of over 3000 but doesn't fix the problem; (c) changing the dimensions to a length of 3 cm [about right for the collage] .... but no matter what I do, by the time the image is positioned correctly on the layer, the image quality has gone from barely acceptable to absolutely horrible. That usually happens during the final resizing (whether by numbers or shift-dragging the corners of the image).
Grateful for any step-by-step strategy as to how best to accomplish the end – by whatever means.  (Or even in a different program!).  Basically, even though I've used images for many years in many contexts, I have never fundamentally understood image size or resolution to avoid getting into such messes.  Also, I'm on a very steep learning curve with Photoshop, InDesign and Illustrator all at the same time - these all seem to handle images differently, which doesn't help.  [Not to mention MS Publisher, which I'm locked into for certain other things...]

Answer 1

For the individual images, don't worry about the ppi or as you call it dpi (ppi is the correct term BTW) only worry about the pixel dimensions. If the pixel dimensions gets too low, it will look horrible as there is not enough data to work with.
Therefore the final document that will house all the other images must be large enough in pixel dimensions to handle the smaller images at a high enough dimension that they will look good.
That being said, if you can load your images in as smart objects as any scaling that takes place samples the original sized document. Making it possible to scale it down to a size that is barely visible and then reset the size back to where it was and have no loss of data.
Where the ppi will come into play is when you are ready to print the final document, that is when the ppi will tell the printer at what size to print the document on the page.
If your collage will span more than one page, you may want to do this in InDesign. All images are linked to their respective container (similar process as smart object in theory) Though I beleive smart objects are embedded which is debatable.
In both InDesign and Illustrator, scaling the image in the document affects the ppi of the image, scaling down would increase the ppi whereas scaling upward would decrease the ppi as the number of pixels (the pixel dimension) has not changed.
With photoshop, you have a choice, when scaling the entire document, you have the option to resample the image, doing so affects the pixel dimension and in that instance would degrade the image when scaling downward and bluring the image when scaling up. As photoshop is removing pixels when scaling down and guessing the neighbor pixels should be when scaling upward.
But, when resampling is off, the pixel dimensions do not change and therefore there is no degration or bluring.
Why this happens has to do with simple math.
inches x ppi = pixels
Knowing any two of the above forumula will give you the third.
When resampling is enabled, the pixels can change and when it is disabled, it is fixed so only the other two values can change.