To resolve the issue crashing , when selecting pictures, you can try the following:
1) Open the photos app and leave it open for around a minute or so
2) Then restart your phone with a soft reset
3) Then open your photos app again
4) After all pics are loaded into the photos app, close the app
5) Now try to change background
This worked for me on my 1520 and 1020. Hope this helps.
Posted on Lumia 1520 via Taptalk