I don't see how, your getBitMap method returns BottomImage.Clone no matter what CloneFirst parameter is.
Yes.

You have commented out some Dispose calls here, Graphics instances created from FromImage must be disposed when done using them, image/bitmap objects must also be disposed after use. So otherImage.Dispose() and CopiedImageGraphics.Dispose() is needed in getBitMap method. In btnDisplay_Click method you need to dispose the image object held by newBitMap variable, and if pbImage.Image already contains an image you must dispose that before assigning it a new image object. imageFile.OpenRead returns a FileStream object, you have to close/dispose this when done using it also. In general you have to analyse your code to make sure you don't open/create objects and just leave them in memory after last reference is released without disposing/closing them properly.

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