There are at least a couple of ways of doing this.
Bookmarks and
cross references can work pretty well. You set up your variable by highlighting the generic term like City in the image below, and Insert Bookmark. Give that bookmark a title (e.g., "Location") so you can reference to it later. This little document explains them pretty well.
http://www.docs.is.ed.ac.uk/skills/d.../3617/3617.pdf
Keep in mind that you'll have to teach people to either be careful about the brackets around the key words, or better yet, how to fix it themselves if they mess it up. One of my coworkers seems to invariably delete one of the brackets, thus getting "Error! Reference Source Not Found" and I have to fix it for her. You'll want to make sure all users in your group go into Options in Word and check "Show Bookmarks" in the "show document content" under the Advanced tab in Options, or they won't probably see the brackets like in the image below. The other thing is, the cross-references and field codes won't automatically update on their own, but the easiest way to update all is to do a quick Print Preview.
You can employ a
VBA user form that would pop up when the document opens, and prompts the user to fill in the blanks. This may be helpful if you have a variety of users at different experience levels, or users who really hate having their formatting symbols show by default, as with bookmarks I found users tended to mess up by not typing within the required brackets, or backspacing over them. But for that you'll have to know enough VBA to make it work. This guy's simple instruction might work for you.
Using a Form in MS Word to Populate a Document - YouTube I did try this setup for one type of short document we use, but I'm the only one employing it for now.
Finally, you might want to think about using a
mail merge setup. That's where people would plug the key data into a table in Excel, and then use that table to populate fields in a linked Word document. We think of using mail merge to send form letters or Emails, but it might be a great solution for this. If you're not up to speed on mail merge, this video is a good overview and I find her very easy to follow.
Properly Use Mail Merge from Excel to Word & Outlook | Dynamic Linking between Excel & Word - YouTube
Something to keep in mind: RECIPIENT might sometimes be Mr. Jamal Hargrove, elsewhere just Jamal or Mr. Hargrove, so that may require collecting title (Mr., Ms. etc.), first name, last name, and additional optional segments such as III or Ph.D. in separate fields, depending upon how formal or informal your document is meant to be.
Edited to add: I re-read your example use of a thank-you "form letter" and really think mail merge is the way to go for this for now. Also I failed to mention, this forum has a whole separate excellent section on Mail Merge under the main Word portion that is worth checking out.