I had checked both the folder permissions and the settings in the gallery section of the control panel when I made this post.
I've changed nothing, but now it is working for some mysterious reason.
Maybe I had older settings cached and not refreshed as I was trying it out the first time... I'll keep experimenting and try to recreate the problem. If I can't then I guess I am good to go.
Another semi-related thing I was wondering about; I originally wanted a gallery to quickly store various GIFs I can use as signature files, avatars etc on other boards and sites, but I don't see a linkable path to these files anywhere?