In order to keep current, here is a photo of our updated image processing workflow. Now, we convert from JPG and JPGW into a GeoTIFF using the OPEN_EV program. The OPEN_EV program has a GUI and is very intuitive, just requiring an export. Currently there is no way to batch convert the files as GeoTIFFS, but it doesn't take very long (just a few clicks per file).
Once turned into a GeoTIFF, we need to set the projection. For a still unknown reason, I can't figure out why Palentier is not producing a proper projection file for the JPG when it matches the jpg and gpx files. This may be a flaw in the code/design. Setting the projection is easy - in Arc, just define the projection based on what is in the original jpgw file (through the toolbox). Batch 'define projection' is currently not working for me, so again we need to do this individually, but at least it functions.
Until we have focused imagery, it'll be tough to make a proper determination as to which mosaicking procedure works best for us.