1. By this you mean that you merge to a new document and then choose to edit individual letters - is that correct?
2. If you change data in the mail merge, it will not change data in the Source Data, to do that you must open the Source Data as in individual file and edit it there.
3. If you want the Source Data to be available without having to browse for it, then it must be saved in the 'My Data Sources' folder located in 'My Documents' - not sure if you can just drop your existing *.doc file in there, or if you will have to type it into Step 3 of the Mail Merge Process (create new when asked about Data Source) as this is automatically saved into the correct folder as *.mdb (Mailing Database) - this file can then be edited by opening it in Access.

Does that help at all?