I've had problems with missing textures when using this mod. At Nexus page there are two "hotfixes" (Bonemold Hotfix, Skyforge Hotfix).

I don't have any idea how to use them, do I install the mod normally first?

Install the mod normally first, then extract the files from the hotfixes and replace the mod's files (copy the new DATA folder over your Skyrim/Data folder).

How simple images can fix missing textures? It's also beyond me why these files haven't been included with the mod.

The DDS files are the textures, as long as we're talking about the same files? http://i.imgur.com/wxwq9g4.png

They are all big files and the hotfixes were released very quickly. I suppose he thought it wasn't worth it to reupload the two affected huge files again, thinking there would be another update soon - 9 months later... I guess that didn't happen.