You don't have to reset the heading styles in sequential numbering and if
you did you would insert a section break between Chapters.

You can manipulate all 9 levels many ways. Use the first 7 levels if you
like for numbering although I don't know who is going to be interested in 7
levels of numbering:

Take a look at this:
http://docsliveonline.com/Documents/TemplateChapterNumbering.pdf

Just build the template on its own first and make sure it is
working properly and you have all 9 Outline Levels attached to their styles
set up properly: Begin at Level 1 and work through to Level 9 methodically
otherwise it will not work properly.  Always make sure you type some test
text at each level on the page and keep it there as you work through
building your level styles 1-9 then save as a xxxxx.dot template and open it
and check it and clear the entire page of text then if it is working
properly resave the new template and then attach this template to your
corrupt document's template. It will work because you should being using
the same Style names for each Level 1 through 9.

Attach Template:
Tools Templates and Add-ins check UPDATE box and path to template then save
document AND then go back to Templates and Add-ins and UNCHECK update
checkbox.

Hope this helps.

To add to what Summer has said, see Shauna's article about appendix
numbering:
http://www.ShaunaKelly.com/word/numbering/NumberingAppendixes.html.