[tanzam75]

> I find Word's attempt to highlight word at a time to be extremely frustrating and distracting.

Use the keyboard if you want to highlight character-by-character.

Word is simply optimizing for the most-common case: copying-and-pasting whole words, sentences, or paragraphs. It's a lot faster when you don't have to hit the exact character boundary of the word -- especially if you're using a touchpad instead of a mouse.