If you used a template that you are not familiar with (someone provided it to you), odds are that you are not familiar with the styles used within that template. The evidence of this is within your description of your problem. Here are some links that will help you in this regard:

Understanding styles | ShaunaKelly.com
Understanding Styles in Microsoft Word
Tips for Understanding Styles in Word | ShaunaKelly.com

With regard to the images becoming blurey when printed, that may have to do with the type and sized of the file inserted into Word (.jpeg, .png et al). IIRC, the .png files all worded well for me.

Hope this helps. Other posters may offer other/better solutions.