Tickled Pink - Category Index Setup

Create a Page under Pages>Add New. 
Name the page whatever you’d like. 
On the right side of the screen under Template select “Category Index” from the drop down. 
Publish your page. 
Navigate to Appearance>Widgets>Category Index and add a Featured Posts widget for each category you want to appear on the Category Index page.

Further breakdown of how each of these sections is set up:

WITH VERTICAL IMAGES

WITH SQUARE IMAGES