A drop-down list in Word would have the same 500 entries. I can't see how that's an improvement over what mailmerge offers - without the need for any code. But, since it seems you're wedded to a macro solution and the same issue has been addressed that way before, see:
https://www.msofficeforums.com/word-...drop-down.html
PS: Your thread title mentions formfields. A formfield dropdown is limited to 25 entries...