Your document is always set to Style, Normal. That is a paragraph Style using the default Fonts as found in the Design Section and indicated in the Font List as (body).
Style1 may be applied and could continue into the next created paragraph depending on Style1 settings.
There are Style+ styles. This is where you have applied a style and then added direct formatting.
You have Paragraph Styles, Character Styles and Paragraph&Character Styles. Any Style may also be linked to another style to help related styles maintain changes that should cascade through all the related Styles.
If you are wanting to apply a different Character Style to PART of a paragraph, make sure that you are selecting a Character Style.
I would reuse the Style Names from a Style Set and Modify them to fit your use. Save the document but also make the changes apply to the Normal.DOT document.
Remember, you remove all direct formatting from selected text with CTRL+SPACE. Then apply a more appropriate Style.
"I get Styles..." Probably not. That's part in your statements, but also in the complexity of Styles and the vast list of settings and interactivity available between styles. Do I get Styles? Enough for my purposes, but I know I don't think of all the features/settings available in Styles.