When merging a document, Word may not suppress blank lines, for example, in the address block. You can change the coding for the fields to suppress the blank lines.  
  1. Run all of the merge fields together (no spaces or carriage returns between them).
  2. Toggle on the field codes by using Alt+F9.
  3. After the second merge field, place a "\b "
" ". The merge field should then look like this {MERGEFIELD Data \b "¶ "} The full address block will then look like this:  

{MERGEFIELD Organization }{MERGEFIELD Name \b "
" }{MERGEFIELD Title \b "
" }{MERGEFIELD Address 1 \b "
" }{MERGEFIELD Address 2 \b "
" }{MERGEFIELD CityStZip \b "
" }

The \b will insert a carriage return before the merge field if the field is not blank. Alternatively, you could use a \f. The \f will place a carriage return after the merge field, if it is not blank.