Can we place “ inside “ according to web standards?

Yes, you can – the DTD says:

<!ELEMENT h1  %Inline;>
<!ENTITY % Inline "(#PCDATA | %inline; | %misc.inline;)*">
<!ENTITY % inline "a | %special; | %fontstyle; | %phrase; | %inline.forms;">
<!ENTITY % special "%special.pre; | object | img ">

That basically means h1 can contain %Inline, which is made of various things, including img