Risa, This can likely be setup on the payment methods page. You should be able to find a page in your admin to configure payment methods, and select the POS or position of these methods. Look for a little input field where you can type a number.
Likewise, the name of the payment method should also appear on this page in an input box. You should be able to type into the box and name the method whatever you like.
Th images that appear, I am not familiar with this, too old of a version for me.
This would probably require some template editing. You would need to look at the templates that control that page, and find the code that makes the logos appear. Then you would look and see what "triggers" them to show up when the method is Paypal, perhaps it is based on paymentid.