First mistake: Using Excel
Many, MANY people seem to think that spreadsheets are to be used as databases, and it rarely ends up working out well. Spreadsheets, for future reference, are for doing calculations and data manipulation.
While it doesn't help this particular problem, it might help head off future repeats. I would personally save the Excel file as a CSV file or some such, and then import it into an Access database. Then use the Access database to feed the mail merge. If I were doing it a lot, I'd set up a proper SQL database server like MySQL, and keep all the contact info in there. It'd be a lot faster and flexible then a flat Excel file.
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