If you upload images via Finder or via image field in a collection, the files are - just files somewhere on your server. Use assets instead to have database entries for each image and than you can query them via image id or image path.
Without o=true you receive a relative url to the generated thumbnail. With enabled output, you receive the whole image.
I’m not sure, but I think I had some problems querying assets with relative urls when a part of the subdirectory is missing… If so, use the image id instead &src=image_id.