For (1)

I would have a look at Graham Mayor's page at

http://www.gmayor.com/mail_merge_labels_with_word_xp.htm

(postcards are essentially the same as labels from a mailmerge perspective).
You probably need to start at around "Insert the fields".

For (2) it depends on the overall layout that you want, but for example, by
splitting each cell into two cells stacked on top of each other, you could
put your return address in the top cell, left aligned, and the names
centered (say) in the bottom cell. In that case you would lose the benefit
of the "Propagate Labels " function, but you can do the same stuff manually.

Peter Jamieson