Sounds like you need to change your uploads directory permissions. The non-generation of thumbnails pretty much verifies that it is a permissions problem.
First, take a general look at the EE Upgrade Instructions, in particular the section on Verify File Permissions. Check everything matches the recommendations.
Then check your File Manager Permissions in
Control Panel > Content > Files. Make sure you have your upload directory defined.
Finally, if you are allowing users to upload files via the Control Panel, the web server daemon
www:www) needs to have write permission to the uploads directory. Try to avoid making permissions 777 (which is global read/write/execute) and just enable read/write for the web server daemon. This should be a simple check and fix that you can do via your FTP agent. Good luck.