This is relatively straightforward. You will just need to modify the blog_post_list.html template (for the list), and/or the blog_post_detail.html template (for an individual post).
Here is a bit of code that I use in blog_post_list.html to show thumbnail-type images on my own blog list page, which is here:
http://rosslaird.com/blog/
<!-- Post item start -->
<div class="col-sm-6 col-md-4 col-lg-4">
{% editable post.title post.publish_date post.content %}
<div class="post mb-20">
<div class="post-thumbnail">
<a href="{{ post.get_absolute_url }}"><img src="{{ MEDIA_URL }}{% thumbnail post.featured_image 360 240 %}" width="360" height="240" alt=""></a>
</div>
<div class="post-header font-alt">
<h2 class="post-title"><a href="{{ post.get_absolute_url }}">{{ post.title }}</a></h2>
<div class="post-meta">
By <a href="{% url "blog_post_list_author" post.user %}">{{ post.user.get_full_name|default:post.user.username }}</a> | {{ post.publish_date }}
</div>
</div>
<div class="post-entry">
{{ post.description_from_content|safe|truncatewords_html:"50" }}
</div>
<div class="post-more btn btn-g btn-round btn-xs">
<a href="{{ post.get_absolute_url }}" class="more-link">Read more</a>
</div>
</div>
{% endeditable %}
</div>
{% if forloop.counter|divisibleby:"3" %}
{% endif %}
<!-- Post item end -->
Then, on the page for each individual post, the image is used as the background for the header. That code lives in blog_post_detail.html, and looks like this:
<section class="module bg-dark bg-dark-60" data-background="{{ MEDIA_URL }}{% thumbnail blog_post.featured_image 1900 700 %}" style="background-image: url({{ MEDIA_URL }}{% thumbnail blog_post.featured_image 1900 700 %});">
<div class="post">
<h1 class="module-title font-alt blog-title">{{ blog_post.title }}</h1>
</div>
</section>
You can see how the above code renders the page by clicking on any post from the listing page.
Hope this helps.
Ross