Bill,
The first didn't work because I used "Chapter" instead of "CHAPTER" the second didn't work because I didn't see it. Sorry.
What you have done now is create a document full of "direct formatted" paragraphs (one for each chapter and one for each section). Much of the power within Word is within Word styles. For example, you could have a title "CHAPTER" followed by as style "Title" followed by a style "Body Text" (that has no first line indent) followed by a style Body Text First Line Indent (that does).
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