Thanks for the reply, but I just discovered an interesting turn of events. I was having the problem on my Desktop computer running Word 365. When I run it on my Notebook running Office 2013, it works in a rational way.
The difference is, when I open the template on my Notebook, I get the SQL popup, but clicking on YES takes me right to the Mail Merge screen where I can select any Recipient .xlsm file, and everything works fine.
When I open the template on my Desktop, I get the SQL popup, but when I click YES, instead of displaying the Mail Merge screen, it opens Windows Explorer, showing Connect to New Data Source and NewSQLServerConnection. If, at this point, I do not navigate to the .xlsm source file and select it. I get the failure described in my original post.
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