1. You need to follow all of the instructions.
2. Once your numbering is set up, you need to apply the appropriate styles to produce the numbering. Do not use the buttons on the Home tab.

Thank you Charles. Yeah, I got the "link level to style" mixed up. Level 1 should be linked to "no style", level 2 should be linked to Heading 1 and so on. My mistake was I made Level 1 linked to Heading 1, level 2 linked to Heading 2...