How to submit form on selecting image in file select widget?
Of course it is possible. You need to take regular managed file and add some JavaScript to the file selection in it. To see how it is done, please see AutoUpload module:


  This module removes the extra button press and hides the "Upload" button via JavaScript for a quicker, automatic file upload. When JavaScript is not enabled, it falls back to the "Upload" button.


The most interesting is line 9, out of it's 22 lines of code:

$('.form-item input.form-file', context).change(function() {


And maybe simply using this module is all you really need?