I strongly recommend using heading styles (Heading 1, for example) for the chapter titles. Then you can define the amount of space before and after as part of the style, and you can use the headings to build a table of contents.

Although I've been using MSWord for years, I have not used it extensively nor done anything sophisticated. What I'm working with now is a 400+ chapter story that the author posted on-line for download. He posted in pdf format which is fine on a computer but doesn't work well on an e-reader so I uploaded it to Adobe for conversion to .docx format. The conversion is not perfect and I'm clean up the document for better display on my Kindle.

In that case, forget about Word.
Get Calibre, free ebook editor/manager/reader. It can import text in various formats and produce ebooks in both epub and kindle format; and send them to your Kindle after.

If you're converting to ebook much, check out the Mobileread forum, http://www.mobileread.com/forums/ for advice.