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1. Is it true I can't send a catalog mailmerge directly to the printer?
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Yes. However, since this is a macro driven process, the overhead to generate a document for all merges, then print it (using the .Printout method) and delete it without saving if the user chose a 'Print' option, is trivial.
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2. Once Word has done it's thing with merge2, is it possible to resume the 'proceed23' macro in Excel to continue on through the cue?
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If I understand your code correctly, something triggers proceed23, as a result of which it gathers som data into an array, then runs through the array populating and calling UserForm4 on each pass. Something else, presumably a command button on UserForm4 triggers the calling of Merge2, which unloads UserForm4 and executes the merge. What you don't seem to have is anything to stop proceed23 running through its loop for populating and calling UserForm4. What you probably need is some code in that loop that tells proceed23 to wait until the command button on UserForm4 is clicked before running its next iteration of the loop. Otherwise (without testing) I think what might happen is that proceed23 exhausts its loop before you've even read UserForm4 the first time through.