See Understanding Styles in Microsoft Word and (shorter) Tips for Understanding Styles in Word by Shauna Kelly.
See also: Why use Microsoft Word’s built-in heading styles? by Shauna Kelly

The basic idea is to set up a few styles for the body of your document and use the built-in heading styles (modified to look the way you want). Any formatting of things less than a paragraph, can be done using character styles. Word has two built-in character styles that can be useful: Strong and Emphasis. My preference is to use the Body Text style rather than the Normal style for my body text.
See: Basic concepts of Microsoft Word: An introduction by Shauna Kelly, MVP