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SJC-Caron - Use Word's Styles, don't pad with spaces and tabs or new lines. Word is a word processor not a typewriter. I seek and destroy all superfluous tabs (they're need in bulleted/numbered lists), all double spaces, all double newlines (^p^p) etc before I save.
There are two ways to convert a DOCX to EPUB with calibre. Firstly via it's conversion process, the other by importing the DOCX into the calibre editor. The difference is that the editor will transform Word Styles into CSS entries more faithfully. It may not make much material difference if you're not using complex Styles. Give both a try.
You might also want to take a look at Toxaris'
e-Book Tools - a Word add-in, as well as having its own Word to EPUB converter it has a number of other very useful features.
BR