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Its not possible to avoid overlapping of scatter-points/bubbles, when they are at same(or nearest) points. But you can show up all dataPoints by setting either fillOpacity or reducing the markerSize.
When dataPoints are highlighted, indexlabels that are placed inside will not be shown. To avoid this you can disable highlighting the dataPoint. Check this updated jsfiddle.
Sorry, positioning image instead of indexLabels is not available as of now. But you can place an image in toolTip. Please check this jsfiddle for the same.