I have located the directory that holds the relevent textures: C:\Program Files\SolidWorks\data\Images\textures but when I add a misc folder for my images, I cant see them in the tree options. How can I add my jpg's in the misc folder and enable it?
You don't need to add it there, nor will it be automatically recognised if you do. Just set the path to your extra textures folder, where ever that is, in Tools/Options/File locations/Textures.