Does Safari have an image Cache storing images from frequently visited webpages locally? If so where is it located
It does, but the location moved to the ~/Library/Containers folder:

~/Library/Containers/com.apple.Safari/Data/Library/Caches/com.apple.Safari/WebKitCache/...


and there:

./Version\ 16/Blobs/
./Version\ 16/Records/[randomized_folder_names]/