You can format the information brought into your documents using Font and Styling options in Microsoft Word. Merge field tags can be formatted individually with Font options; or, to format merge tags consistently across your document, you can create and apply Styles.
To format a merge field tag using Font options, highlight the merge tag or piece of text that you want to format then open the Font options by clicking on the expand button in the "Font" group.
In the Font options window, select the formatting options that you would like to apply to the information pulled into the document by the merge tag.
For more elaborate designs, you can style text and merge tags by clicking on the Text Effects button in the Font group. Then select the formatting options that you desire.
In MS Word you can create Styles to format groups of text, including merge tags, for use in Document Automation.
For the basics of working with Styles in Word, click HERE.
To open the Styles panel, click the expand button in the Styles group.
In the Styles panel, click on the style name that you want to customize, then select "Modify".
This will open the "Modify Style" window where you can modify basic styling and formatting. Clicking on the "Format" dropdown will give you even more options.
Once you have modified the style to look the way you want, click OK. Throughout your template, highlight the pieces of text or merge fields that you would like to format with the style, then click on the style name in the Styles panel.