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2. I tried over and over to update the datasource to the actual template and also to the main merge document.
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Did you actually open the template for editing? Double-clicking on it doesn't do so - you need to open it via File|Open with the 'Templates' file type selected.
AFAIK, links to CSVs per se are not an issue, though changes in in the CSV's filename will cause problems, as may changes to its structure.