The large story/image at the top of the News & Events page is a starred news item (that has an image) from the Core: News & Events group. If more than one story has a star, the page will show one of them at random.
Make sure that the starred story has a high resolution landscape image, to fill the space without being stretched or distorted.
This widget shows the top three stories from the Core: News & Events group (excluding the featured story).
This widget shows the top three events from the Calendar group.