I agree with you. There are some things that are just beyond our ability to imagine. It's not necessarily infinite in the sense that it encompasses all possible concepts but rather limited by the constraints of our cognitive ability and the universe around us. So some things which are impossible to imagine right now might be able to be imagined in the future.

>Just a 16x16 image has 256 pixels, and each can have 2563 = 16,777,216 colors. In conclusion, there would be 4,294,967,296 possibilities. Now, consider you would have to find a single word for each variation.

Yes, it's definitely impractical to describe each variation but I'd just like to point out that OP didn't say that each variation has to be described in a single word. So by describing each pixel by a string of words that describes its colour we'd probably need billions of words to describe the image. Which means it can be described. Plus, hex codes also describe how red, green and blue the colour is. Even if we can't find a single word for each variation, we can read that and visualise the mixing of colours. There are also online tools that give you a usable name for any given RGB hex value.

I agree with your 2nd point. Describing particles at each scale is just beyond the scope of what is currently known and understood.

While I do believe some things are impossible to describe, it is unlikely that the number of such things is truly endless. I mean, it is also often possible to find ways to convey meaning and understanding even if a complete and perfect description is not possible.