No, it is not designed for files used in content. It is designed for sharing files that need to be secured by roles so that only users with correct permissions an download.

Files used in content can be uploaded directly in the editor (or the File Manager), for example to add an image to content you click the image toolbar in the editor and it opens a dialog and from there you can browse the server and upload image files if needed. Or you can use the Link toolbar to create a link to a file and you can browse the server and upload files that you want to link to. Files linked in content such as images or linked files are not protected files, anyone who knows the url could download the image or the file.

Shared Files feature is more like for sharing pdf files or office documents and they are protected so that even if someone can guess the url they cannot download it without permission according to roles that are allowed.

Hope it helps,

Joe

library of documents that would need to be secure and permission based. Sounds like something we'd need to write custom. 

this is exactly what the Shared Files feature is for. You put it on a page protected by roles and then only role members can download the files. You can use different instances of Shared Files on different pages with different roles.

If you need something where the roles are different per file then you would need to implement something custom, but if you can group them into collections by which roles should have access then Shared Files is a good solution.

But again it is specifically for downloads not for files like images embedded in content. I mean you could copy the download link for a file from Shared Files and use that link in content (Html content feature for example), but the user will only be able to download the file if he has view permissions on the page where the Shared Files instance is located.

Hope it helps,

Joe