I tried each step you said but it didn't work. This was a simple task in my last LG phone. It really shouldn't be complicated. I use this feature because I have many people with the same name in my contacts.
When u go Online using ur computer u login g+ account go to ur pictures folder should be a feature in there to download all pics to ur PC ?
Then connect ur phone to PC are ur able to see internal SD and ext SD or is it just dcim folder the dcim folder is what ur looking for ..
Copy ur pictures u want in for ur contacts n place them in the dcim folder
Then unplug ur phone u now should be able to use the picture app that comes with ur phone and view those pictures?
If u can see those pictures then we are good :0)
Option 1
Choose ur picture u want to save as contact it will pop up
Top right hand corner u will see .... or click menu button on ur phone another menu comes out.
choose 'set as' another menu will surface
choose as contact
Now assign that picture to ur contact.
It may ask u to edit or crop that means the picture is to big and it wants u to select what part of the picture u want to make veiwable for ur contact picture
Or
Option 2
Now go to ur contacts choose any contact
On my phone I choose contact then I see their name ph# and picture of android guy I click on him and it asks me to choose picture for contact. I go through and click on a picture that is in the dcim folder it may ask if I want to edit picture before selecting I hit OK and there it is in contact now with picture of choice
If all else fails call me and screammmmmm lol..,...