Grey bar above and below photos inserted in MS Word

[Chive55]

Hi, I've been trying to work around this problem for a couple of months now and it's driving me up the wall.

I help to edit a weekly newsletter in MS Word (Office 365). The newsletter contains dozens of photographs and almost every time one is inserted, well it looks fine at first but when it's time to reduce the spacing between images, or between images and text, a 'phantom' grey box appears both above and below the photo, and it's impervious to deletion or resizing. At first the page looks like this: 

until it's time to do away with the unwanted space; as soon as I click into the space between the image and the caption, this is what appears: 

Okay, so I CAN work around it by backspacing the caption and then doing a soft return to allow the caption to be moved without realigning the image - but I shouldn't have to go to that much trouble, and never used to have this problem.

I'd be super grateful if anyone could please offer advice as to what on earth is causing this grey bar to appear - could it possibly be a setting on my camera (a Sony Cybershot), or has Word set a strange default for images? I did try changing the text wrapping in the document to Square - as I saw suggested somewhere for a similar problem - but it just messed up the formatting of the entire document. 

Thank you!

[#2]

@Chive55 Can you upload a document that exhibits the issue so that we can investigate the problem.

[#3]

@Doug_Robbins_Word_MVP Thank you so much for your response. I'm attaching a sample page with two images and captions - at this end, the grey bar appears if you click in the area below the photograph and above the caption, where it should just be a regular line of text space. Also, there's no regular space between the first caption and second photograph, so I have to 'delete' after the first caption and double soft enter in order to produce a space that I can reduce in size. I hope the document behaves the same way when you look at it. Thanks so much.

[#4 · Accepted solution]

@Chive55 Images that are inserted inline with text are located in a paragraph and the grey bar that you see is the space after that paragraph

If you change that setting from Auto to 0. the grey space will not longer appear.

[#5]

Thank you SO MUCH Doug! You have saved both my sanity and a great amount of time.
All the best!